Escalating covid woes weigh on commodities while downbeat China data exerts additional pressure on the Brent oil prices during early Monday. Also favoring the oil sellers could be the quote’s U-turn from 50% Fibonacci retracement of early August upside, followed by a break of the one-week-old rising trend line. Hence, the Brent oil prices are all set for further weakness towards a horizontal area near $68.00, comprising lows marked in the last one month. However, oversold RSI conditions may challenge the bears afterward, if not then 61.8% Fibonacci Expansion (FE) of the current month’s drop and pullback around $67.15 will act as an extra filter to the south.
Meanwhile, corrective pullback needs to cross the support-turned-resistance line near $71.65, a break of which should direct oil buyers towards the 100-SMA level of $72.90 and then to the $73.00 round figure. In a case where the Brent bulls stay dominant past $73.00, $74.20 and the monthly peak surrounding $76.60 should return to the chart.
Meanwhile, corrective pullback needs to cross the support-turned-resistance line near $71.65, a break of which should direct oil buyers towards the 100-SMA level of $72.90 and then to the $73.00 round figure. In a case where the Brent bulls stay dominant past $73.00, $74.20 and the monthly peak surrounding $76.60 should return to the chart.