Brent breaks higher from one triangle into another
Brent has rallied out of the short-term ascending triangle that has been in play over the past week, with a push above $48.66 particularly notable.
While this provides a bullish outlook, it is worth noting the wider descending highs originating from mid-August. A bullish breakout from this would come with an hourly close above $50.25. However, with price having retraced into the $48.66-48.82 support zone today (12 and 23 Sept peaks), there is a good chance of a bounce from here.
A break below this level could provide us with a sharp pullback, given the overbought stochastic and respect of the recent ascending trendline resistance. However until that happens, another bounce is preferable, where a move above $50.25 would be required to provide a longer-term bullish outlook.
WTI pulls back from trendline resistance
WTI is also pulling back marginally following a rally into a convergence of two notable trendlines. So far the pullback has been minimal, however, should we see Brent break below $48.66, we would likely see WTI move lower too.
The reliance on Brent for our support comes from the fact we have less notable levels to the downside in WTI.
However, once again, we are clearly exhibiting lower highs from a wider perspective and that means we would need to see a break and hourly close above $48.12 to negate the idea we could see US crude start to weaken before long.