Brent Crude was able to sustain its values going into the weekend and started trading this week within the alluring vicinity of early June high highs.
Brent Crude has not experienced the fire storm of its closely correlated trading cousin WTI, West Texas Intermediate. However, the energy has certainly experienced a wide range of price fluctuations and speculators of Brent Crude need to understand market sentiment is capable of causing the commodity sudden volatility.
This morning’s price for Brent Crude maybe showing signs of challenging price values touched in early June when the energy touched the 43.40 US Dollar juncture before seeing a loss of value in recent weeks. Current resistance for the commodity remains around 42.80 and traders should look at this level as a crucial inflection point for potential price action. A large technical gap in value still exist between the 43.50 and 44.50 levels which were created in late March when the energy market was hit with global uncertainty due to questions about demand as the onslaught of Coronavirus caused panic.
However, panic has lessened considerably and normal trading has been practiced since late April in the energy markets. Short term support for Brent Crude appears to be around the 42.00 mark. The past few days of trading for the commodity has seen most of the price action take place between ratios of 41.00 and 42.50 US Dollars. And in early trading today Brent Crude has moved largely between the 42.00 and 42.50 levels.
The energy market remains sensitive to any developing news regarding Coronavirus due to is perceived effect on economic conditions and outlook. Whether it is right or wrong many nations have seemingly begun to take the approach that economic health is vital to the long term interests of their affairs, and even as news circulates about a potential second wave of Coronavirus most economies are continuing to open up in gradual stages. This has created a sense of hope within the investor community which has helped sustain commodity prices and the notion demand will stabilize and increase.
Before seeing its price shatter due to fears regarding global economic conditions, Brent Crude traded comfortably within a ratio of 53.00 to 65.00 US Dollars. Those days of high values may seem like a distant dream for short term traders and they likely are, meaning traders should focus on technical charts from mid-May until the present. Strong support for Brent Crude appears ready at the 40.00 level and if market sentiment remains positive, the potential for the commodity to try and find upside values eventually to the 44.50 juncture do not seem farfetched. Short term traders may want to consider buying Brent Crude and looking for upside at its current price levels while using proper risk management.
Brent Crude Daily Outlook:
Current Resistance: 42.80
Current Support: 42.00
High Target: 43.50
Low Target: 41.00