Brent Futures Covers Gap Down; Still Bearish in Short Term

Technical analysis of Forex market

Brent futures sank towards a fresh low of 31.23 on Monday, creating a gap down, however, they covered some of the losses in the previous four-hour sessions.

Looking at the technical indicators, the RSI turned lower but is still the near 50 level, while the stochastic oscillator is losing momentum after the bearish cross within its %K and %D lines in the positive area. On the other side, the MACD oscillator is remaining above its trigger line, but the upside movement is fading.

If the price continues to recoup the bearish structure, the bulls would probably cover the 37.23 – 45.10 gap, which includes the 20-period simple moving average at 38.37, the 39.60 barrier and the 23.6% Fibonacci retracement level of the down leg from 71.30 to 31.23.

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On the flip side, if the oil drops lower, it could hit the fresh trough of 31.23 and then the 161.8% Fibonacci extension level of the minor upward move from 31.23 to 38.60 at 26.07.

Summarizing, Brent crude oil futures maintain a bearish bias in the short-term as the price still holds below the steeply sloped moving averages lines