Brent Buyers Confront Key Resistance Amid Political Developments

Market Overview 

Monday’s trading in Brent crude saw notable movements as market dynamics shifted in response to political and supply developments. The increasing likelihood of Kamala Harris winning the U.S. presidential election, according to the latest weekend polls, put significant pressure on the U.S. dollar. A weaker dollar typically boosts commodities like oil, as they become more affordable for holders of other currencies. Additionally, OPEC+’s decision to delay its planned production increase by one month has further supported Brent crude prices. As a result, Brent crude managed to break out of its recent short-term descending channel, sparking renewed interest among buyers.

Technical Analysis

On the four-hour chart, Brent crude oil opened on Monday with a bullish gap, breaking out of its descending channel. Buyers are now confronting critical resistance at $74.85. A sustained break above this resistance would provide further momentum, potentially driving prices towards higher targets at $76.15, $76.96, and ultimately $78.26. The ascending price movement reflects an attempt by bulls to regain control in the wake of recent supportive news.

Alternative Scenario

Conversely, if Brent fails to sustain momentum above $74.85, attention will shift back towards the $72.74 support level. A breakdown below this level would invalidate the current bullish scenario and could indicate a resumption of the bearish trend, inviting sellers back into the market.

Oscillators Confirmations

Oscillators are reflecting mixed signals but lean towards bullishness. The RSI remains in positive territory, suggesting continued buying interest, while the MACD is also aligned upward, indicating strengthening bullish momentum. However, moving averages indicate a mixed trend, hinting at the need for cautious optimism, as buyers face potential exhaustion near these resistance zones.

Key Technical Levels

Resistance Levels:

• Resistance 1: 74.85
• Resistance 2: 76.15
• Resistance 3: 76.96
• Resistance 4: 78.26

Current Price: 74.72

Support Levels:

• Support 1: 72.74

Key Events to Monitor

Several crucial economic releases this week could significantly influence Brent prices. The U.S. and Chinese Purchasing Managers’ Index (PMI) figures, scheduled for release on Tuesday, will offer insights into economic activity in the world’s largest oil-consuming nations. Additionally, the American Petroleum Institute (API) Crude Inventory Report will provide vital supply-side data, which could further sway market sentiment depending on stock level changes. Meanwhile, ongoing developments in the U.S. presidential election continue to create volatility across risk assets, with commodity markets keenly attuned to shifts in political sentiment.

Conclusion

Brent crude has broken out of its descending channel, facing immediate resistance at $74.85. A successful break could drive prices higher, while failure may lead to a renewed bearish move below $72.74.