Brent crude oil prices broke below the 200-day SMA line at USD70 on May 24. The rebound on Monday & Tuesday failed to push the price above the 200-day SMA line. In the last 3 days, Brent dropped from ~USD68 to ~USD62.
Chart 1: Brent’s daily chart as at May 31, 2019 (Source: Stockcharts.com)
Looking at the 2-year daily chart (below), we can see that Brent is poised to go lower. MACD has gone below the zero line and -DMI has crossed above +DMI (with ADX trending higher).
Chart 2: Brent’s daily chart as at May 31, 2019 (Source: Stockcharts.com)
While Brent may find support at horizontal lines at USD61.00 and USD58.00, the strong support will likely be at the line connecting the past 3 years low, AB at USD52.00.
Chart 3: Brent’s weekly chart as at May 31, 2019 (Source: Stockcharts.com)
According to various report, the decline in crude oil was driven by surging U.S. stockpile and economic concerns which are brought on by the reckless behavior of the current U.S. administration (here).
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