Mid-Week Technical Outlook: Oil waits for fundamental spark

<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></strong></p>
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<ul>
<li>Brent bulls and bears in tug of war</li>
<li>Prices trapped in range on D1 charts</li>
<li>Incoming EIA data could trigger volatility</li>
<li>Technical indicators favour bears</li>
<li>Key levels of interest at $79 and $75.50</li>
</ul>
<h3>It has been a choppy affair for oil prices thanks to a combination of fundamental forces.</h3>
<p><img fetchpriority="high" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BrentH4_0.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="02387e42-c643-45ed-829c-1225cbc00bba" data-src="/s3-static/users/user17/BrentH4_0.png" /></p>
<p>Earlier in the week, oil bears were in power after <strong>Riyadh lowered its official selling prices for oil exports </strong>over the weekend. Only for bulls to return amid Middle East <strong>supply concerns, a Libyan supply outage, more attacks on vessels in the Red Sea</strong> and an industry report showing a bigger-than-expected drawdown in crude inventories.</p>
<p>Prices are currently trapped within a range on the daily charts with support at <strong>$75.50 and resistance at $79.00.</strong></p>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BrentDaily_4.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="e348dd9a-e8b6-4806-a8f3-ceca52eeb538" data-src="/s3-static/users/user17/BrentDaily_4.png" /></p>
<p>The global commodity could be injected with fresh volatility later today due to the incoming <strong>Energy Information Agency (EIA) report.</strong> A build or drawdown in crude inventories has the potential to trigger a <strong>breakout/down opportunity in oil prices. </strong></p>
<p>Looking at the technical picture, the indicators favour more <strong>downside with prices respecting a bearish channel. </strong></p>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BrentDaily1.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="b41f3a67-7591-41db-903e-13b0a8fc7486" data-src="/s3-static/users/user17/BrentDaily1.png" /></p>
<p>Zooming out to the weekly charts, we see a similar bearish picture. However, strong support can be found at <strong>the 200-week SMA. </strong></p>
<p><img loading="lazy" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BrentWeekly_2.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="131e825b-de2d-4040-bea7-e04e1e21e4d9" data-src="/s3-static/users/user17/BrentWeekly_2.png" /></p>
<p>Taking a quick look at the monthly charts, prices are approaching a significant support at $71.50. A solid monthly close below this level could signal further downside.</p>
<p><img loading="lazy" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BrentMonthly.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="b9e0aab3-8ad7-4484-9a71-807c101a3612" data-src="/s3-static/users/user17/BrentMonthly.png" /></p>
<p>Redirecting our attention back to the daily timeframe, <strong>bears need to secure a solid daily close below $75.50 to regain control.</strong></p>
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<h3>Sustained weakness below $75.50 could encourage a decline back towards $72.50.</h3>
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<h3>Should $75.50 prove to be reliable support, that may push prices back towards $79.00 and $80.70.</h3>
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<p><img loading="lazy" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BrentDaily2_0.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="752810e9-8081-404a-a457-0066c81c6571" data-src="/s3-static/users/user17/BrentDaily2_0.png" /></p>
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<p><img loading="lazy" decoding="async" class="size-full wp-image-54242 alignleft" src="https://www.investmacro.com/articles-analysis/wp-content/uploads/2014/07/Forex-Time-Logo.png" alt="Forex-Time-Logo" width="262" height="90" /><strong>Article by <span><a href="https://www.investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></span></strong></p>
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