The Commodity Specialist view – Following the decisive May downmove a consolidation pattern has been unfolding, with expectations of an eventual further bear leg maintained throughout. Is the market now ready to oblige?
- BRENT CRUDE – WEEKLY CONTINUATION CHART:
The May fall was marked by a Key Reversal Week and Month (latter not shown here).
Good support came from around the 38.2% pullback level, but in the Climate & Energy and Commodity Specialist Guides we have maintained our expectations of a further bear leg. - BRENT CRUDE – DAILY CHART OCT-10:
The summer consolidation looks to have completed a simple/standard up-down-up shape.
The break of a small channel base projection is an initial negative sign now – a further one would a close below the 71.50 06-Jul low.
We can then target the 61.00 area, where an equality target resides (May downleg extended off 83.09 04-Aug high). A bear channel base projection also currently runs through here.
The whole picture would change markedly should price recover through that 83.09 high. - US LIGHT CRUDE – DAILY CHART OCT-10:
On the US Crude chart the 06-Jul low, 72.15, has already been breached.
Eyes are now swivelling towards the equality target, again at 61.00, and bear channel base projection.
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