Brent Oil (+1.72%) is rising today as the market seeks to recover some of the recent losses since the OPEC meeting last month. Price declined more than 13% from the high seen on the day of the OPEC meeting but buyers have stepped in at a familiar region around 47.60. 

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 Whilst there has been some support form the lows around 47.60 there is much to suggest that the market remains in a downtrend with the 8 and 21 period EMAs diverging as the sell-off gathered momentum.

Price is now back near the 8 period EMA (yellow line) but it is not until price moves above this that there will be any signals of a longer term trend change. Furthermore crosses between the 8 and 21 period EMAs have provided good trading opportunities since last November beginning with the bullish cross prior to last November’s OPEC meeting.

Traders seeking long opportunities mat consider the recent low a higher low and therefore believe it negates the run of lower lows and lower highs. However if we ignore the spike down seen during the illiquid Asian session just over a month ago there recent decline has seen lower closing levels.

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 On shorter time frames an inverse head and shoulders reversal pattern could be in play. On a H1 chart a head at the low of 47.44 and two shoulders are quite easily identifiable. This setup would target a move to 49.70 if it plays out in a textbook fashion. The move would have a nice symmetry to it as this possible target lies just below where price traded ahead of last week’s DOE inventory figures.