Technical Analysis: Brent oil battles 21-day SMA support as risks drop
Having surged to the early 2020 tops during the last week, Brent oil prices have been declining so far in the current week. While RSI pullback from the overbought area seems to have triggered the corrective move, the energy benchmark presently tests 21-day SMA around $49.30 as sellers catch a breather. Considering the sustained break of an ascending trend line from November 09, Brent is likely to extend the latest weakness towards the monthly low near $46.70. Though, any further declines will make the commodity vulnerable to revisit the early November tops near $45.00.
In a case where the black gold bounces off the 21-day SMA level of $49.30, the $50.00 round-figure can check corrective pullback targeting the previous support and the recently flashed multi-month high, respectively around $52.00 and $52.45. Should the oil bulls manage to cross $52.45 on a daily closing basis, March top near $54.25 will be in the spotlight. Overall, Brent bears may consider the cautious optimism relating to the US stimulus and Brexit while catching a breather. However, more downbeat signals from the coronavirus (COVID-19) conditions in the UK, Europe and the US can keep them hopeful.