Daily Commodities Update: Brent Crude Oil

By Jonah S. Ford

A textbook triangle breakout pattern has formed on the longer term Brent Crude Oil futures chart, signaling a possible price break towards the $100 per barrel level this week. Brent Crude has been trading in a very well defined Triangle chart pattern for most of May, and has been trending lower with the US Crude oil futures which have already slipped below the hundred dollar mark.

This Triangle chart pattern has held repeated tests of support and resistance trend lines, with the last failure to break through the upper boundary near $113 per barrel appearing to be a key failure for the market. The subsequent weakness in Tuesday’s trading breached the support near the $110 price level, initiating a high momentum downside breakout to complete the pattern.

If fulfilled, the projected price target is forecast to reach a minimum low of $104.32, with $98.45 rounding out the bottom of the estimated range. This would take the Brent Crude futures down more than $20 per barrel from their recent high, which is beginning to take on the signs of a major top. If so, a sustained decline below this target may develop in the long term.

(Source: http://www.commoditiesmansion.com/technical-analysis/daily-commodities-update-brent-crude-oil/)