Brent oil neutral in $62.54-$63.85 range

SINGAPORE: Brent oil looks neutral in a range of $62.54-$63.85 per barrel, and an escape could suggest a direction. The uptrend from $54.60 has been violated, as confirmed by a broken trendline.

The current consolidation could be classified as a pullback towards the trendline.

It is not very clear if the consolidation is over.

A break below $62.54 may signal the extension of the downtrend towards $61.74.

A break above $62.85 would suggest the formation of a flat pattern, which started at the Feb. 18 high of $65.52.

This pattern is characterized by three component waves roughly equal in length. That means oil could approach this high again.

The bias could be towards the downside, as a five-wave cycle from the Jan. 22 low of $54.48 has completed.

On the daily chart, oil failed to break a trendline passing through the peaks of the April 25, 2019 high of $75.60 and the Jan. 8, 2020 high of $71.75.

The contract may hover below this trendline for a few days or even weeks. A retracement analysis suggests a target zone of $58.49-$61.17.

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