Technical Analysis: Brent oil bears need $78.00 breakdown to retake controls

Brent oil prices consolidate the heaviest daily loss since late August, not to forget reversal from November 2014 levels, while picking up bids to $81.70 during early Thursday. The oil benchmark refreshed the multi-day top the previous day but overbought RSI joined firmer USD to drag the quote towards the first negative daily closing in six days. However, the quote stays inside a rising channel formation, not to forget remaining beyond a convergence of 100-SMA and a seven-week-old support line, to keep buyers hopeful of witnessing the fresh high above $84.00. In doing so, an upper line of the short-term rising channel, near $84.50, may play a role to trigger another pullback amid likely overbought RSI conditions, which if ignored could propel the upside moves toward the $90.00 threshold.

During the pullback moves, the stated channel’s support near $80.60, followed by the $80.00 psychological magnet, will be important for short-term traders to watch. Should oil prices drop below $80.00, the aforementioned support confluence around $77.80 will be in focus. Overall, oil bulls are tired but not out of the woods, which in turn seeks a strong catalyst for a pullback, highlighting today’s US debt ceiling vote and Friday’s NFP figures for conviction.

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