Crude oil prices took a downside hit this Friday and look set to register the steepest drop for April 2021, as India’s coronavirus situation takes a turn for the worse.
With crematoriums packed full and the country hit with a shortage of bed spaces and medical oxygen, the situation in the world’s 3rd largest importer of crude oil has prompted huge demand concerns. This comes even as the OPEC + alliance gets set to cut back on the production curbs from the start of May.
Crude oil price on the Brent crude benchmark is currently trading 2.89% lower on the day.
Technical Levels to Watch
The price picture on the Brent crude oil benchmark’s daily chart is a classical play of price action when stuck within a range formed by a channel pattern. Price has just completed another oscillatory cycle that has seen it hit the upper boundary of the flag, with a subsequent rejection and pullback as shown by the active daily candle.
This move puts crude oil price action on the path towards the flag’s lower border but needs to break down the support levels at 66.81 (currently at risk) and 65.95. A breakdown of the flag’s lower edge leads to a resolution of the pattern, with a projected completion point of the measured move set at 57.47. This move needs to take out 64.26, 62.21, and 60.07 along the way to be actualized.
On the flip side, bulls need to see the flag’s upper border taken out, which would invalidate the flag and open the door towards 70.01 and possibly 71.44. This move requires a bounce at the current level or from the 65.95 support, taking out 67.74 in addition to the flag’s upper limit. Attainment of 71.44 marks the reclaiming of 2021’s high. 73.34 serves as an additional target if the bulls can surmount these barriers.
Crude Oil Price (Brent); Daily Chart
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