BRENT OIL – fresh weakness generates initial signal of bearish continuation

Brent price fell on Wednesday, after holding within narrow range in past two days, on track for eventual close below Fibo support at $73.04 (76.4% retracement of $58.70/$119.47 advance), after four consecutive failures at this level.

Persisting optimism on signals of progress of peace talks in the Middle East would open way normalization of supply through Hormuz strait, keep the price under pressure, along with warnings from market analysts about potential oversupply and signals that OPEC may raise oil production from August.

On the other hand, Russian ban on diesel exports, due to shortage in the local market, so far did not obstruct larger bears.

The contract ended trading in June with loss of 20%, the biggest drop since March 2020 and being in red for the second consecutive month that adds to negative outlook.

Fresh weakness cracked the floor of recent congestion ($72.00 zone), with firm break lower to generate initial signal of continuation of broader downtrend and expose targets at $70.50 (weekly Ichimoku cloud top) and $70 (psychological), guarding bear-channel support line ($68.20).

Firmly bearish daily studies contribute to negative picture, however oversold RSI warns that traders may opt for partial profit taking in coming sessions.

Res: 72.40; 73.04; 75.52; 76.87
Sup: 71.00; 70.50; 70.00; 69.15