The Brent crude oil is under bearish pressure. The 4-hour chart shows that it is trading below the 21 SMA and below the 6/8 Murray. The key support is the 4/8 Murray line around 68.75. Above this level, there may be a technical rebound.
At a fundamental level, inflation remains a concern for consumers, politicians, and investors. The Biden administration announced that it was pleading with OPEC + members to increase oil production to stem inflationary pressure due to the increase in domestic gasoline prices.
The market sentiment has been under downward pressure due to the continued speculative liquidation and market uncertainty about the decrease in demand that could be affected by the delta variant of COVID-19. In addition, the rising inflation is affecting strongly the oil market.
The Brent crude benchmark has retreated from the psychological level of 70.00. It is now heading towards the 2/8 Murray support zone around 65.62. As long as Brent is trading below the pivot point of 68.75, there may be a further drop.
On the contrary, the demand for Brent may recover if the price increases above 68.75. Further on, it may rise towards the resistance zone of 70.60 which is the SMA 21, and up to 2/8 of Murray located at 71.88.
Our outlook is still bullish, although the market is under downward pressure. We should understand the market sentiment. Since everyone is selling, we always negotiate against it, so the key is to buy above the weekly support of 68.20 and above 68.75.
The reading of the Eagle indicator that measures the volume of the market is showing an oversold signal. It is likely that in the coming days there will be a bullish movement of Brent.
Support and Resistance levels for August 16 - 17, 2021
Resistance (3) 70.62
Resistance (2) 69.60
Resistance (1) 69.07
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Support (1) 68.23
Support (2) 67.82
Support (3) 65.56
