Brent crude oil price is stuck in a pennant pattern as it approach $85/bbl on supply concerns about lower levels of world oil supply. What can traders expect next?
3 October, GKFX – Brent oil has charted a pennant pattern on the hourly chart. An upside break would signal a continuation of the rally from the low of $82.52 and may yield a break above the recent high of $85.42.
Could Oil See a Pennant Breakout?
The stacking order of the 50-hour exponential moving average (EMA), above the 100-hour EMA, above the 200-hour EMA, indicates the path of least resistance is on the higher side. The hourly chart relative strength index (RSI) has regained bullish bias and is again trending north. As a result, oil could see a pennant breakout in the next few hours.
The ascending 10-day EMA of $82.50 could come into play if the pennant is breached to the downside.
Current Price: $84.91
Daily High: $84.94
Daily Low: $84.59
Trend: Bull breakout likely
R1: $85.00 (psychological hurdle)
R2: $85.42 (Oct. 1 high)
R3: $86.00 (zero level)
S1: $84.35 (previous day's low)
S2: $83.85 (bullish 5-day EMA)
S3: $82.50 (ascending 10-day EMA)
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