Last January Brent Crude completed an 81.4% correction off the record high of $146.08 reached in 2008 when it found a low at $27.13. Since then Brent has advanced as much as 111.9% as of the $57.50 high hit last week. It looks like there’s a good chance that Brent can continue to strengthen and that it has further to go.
Three weeks ago Brent broke out of a five-month sideways consolidation channel with a strong wide range candle that closed above the consolidation and near the high for the week. It is now well above the 55-week exponential moving average (ema). In addition, the 21-week ema has crossed above the 55-week ema for the first time since August 2014. Each is a bullish sign.
The next primary intermediate target is the completion of a measured move around $67.24. That’s close to the 200-week ema, now at $67.11. Also, this is where the second leg up in the uptrend off the January low matches the advance of the first leg up. The next higher target zone would be from approximately $69.59 (prior peak) to $71.40 (50% retracement of the downtrend starting from the 2014 peak).
Retracements back towards support of the recent consolidation zone will likely see strength as buyers step up in anticipation of a continuation of the uptrend. (www.marketstoday.net/en/)