Brent - Testing supports

This is the 3rd consecutive day of losses on the Brent contract but we might see some support come back in around the 106.50/106.00 area.  After testing the 117.00 level due to the escalation in the Syrian crisis, the risk premium has been slowly reduced as the western intervention seems less likely now.   The technicals aren't giving us a clear story at the moment, but taking step back and looking at a longer term view, we are still in a slow uptrend as we still have a couple trendlines intact.


On the upside, the important levels to watch out for are the top of sideways range at 111.00 and previous highs of 117.00; then on the downside 106.00, 102.00 and 100.00.  We might see a brief recovery over the next couple of days, after which I would expect the contract to being under further pressure once again.  The 100-day simple moving average has acted as a good support/resistance level in the past so watch this going forward.

I will also note that like any other financial commodity contract, they are driven by the physical underlying and are subject to an unforeseen event which would throw all the technicals out the window immediately!

Charts sourced from ig.com