Brent Oil: Break above $76.38 needed to shrug off deteriorating momentum – Credit Suisse

The Brent Crude Oil rally has stalled again, with weekly momentum deteriorating sharply. Nonetheless, strategists at Credit Suisse expect the black gold to eventually resume its rise to test the $77.84 at first.

Momentum picture warns of a top 

“The deterioration in weekly RSI momentum is now of growing concern, but our bias remains to view consolidation as a temporary pause ahead of an eventual break higher.” 

“A quick move back above $76.38 though is needed to stabilize the market for a test of the $77.84 high. Beyond here can curtail thoughts of a more prolonged correction with resistance seen next at our original bull ‘flag’ target at $79.10, then the ‘measured triangle objective’ at $82.50.”

“Below $71.74 would see bearish pressure start to increase further in line with the momentum picture for a test of the $68.3/67.44 recent low and trend support. Removal of here would warn of a more serious break lower, for a move to $64.57 next, with scope for the 200-day average at $61.65.”

“Weekly RSI momentum holds a top and a bearish divergence, increasing the risk for a potential top in the market also.”