Brent crude price holds above 200-day moving average as bearish momentum persists

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Brent crude drops 2.04% to $96.35

Highlights

Reduced probability of US strikes on Iran lowers geopolitical risk and eases concerns about Middle Eastern oil supply disruptions.
Diminished regional threat has moderated risk premiums and curbed speculative buying in Brent crude futures.
Brent crude price trades below key short- and medium-term averages with momentum indicators bearish, targeting a $92.75 to $99.95 range.

Risk premium fades as US strike fears on Iran subside

Public statements from former President Donald Trump indicated it is 'highly unlikely' the US will carry out strikes on Iran, lessening geopolitical risk and reducing concerns about disruptions to Middle Eastern oil supplies. This reduction in perceived threat moderates risk premiums and dampens speculative buying activity in Brent crude. These developments have coincided with softer price action.

Downside momentum prevails as oversold signals emerge

XBR is trading below the MA-20 and MA-50, indicating short- and medium-term weakness, while still maintaining a position above the MA-200, with the Ichimoku Kijun providing immediate resistance at $97.65. Momentum indicators, including MACD and ADX, are both signaling a sell bias. RSI remains neutral, but both Stochastic RSI and CCI are oversold, hinting at possible selling exhaustion. Bull/Bear Power is negative and the Awesome Oscillator supports continued downside pressure.

Downside scenario favored as breakout risks remain limited

Over the next 23 days, XBR is expected to trade within a range of $92.75 to $99.95, reflecting typical volatility for the asset. The probability of a move higher is considered very low, while further downside remains the dominant scenario. A bullish reversal would require a breakout above resistance at $97.65, whereas a move below support at $92.75 could trigger additional selling.

Viktoras Karapetjanc, senior analyst at Traders Union, notes that public reassurances from former President Trump have reduced the geopolitical risk premium for Brent crude. He sees continued downside momentum, with technical signals confirming a prevailing sell bias. However, he remains constructive given that XBR still trades above its long-term moving average. Karapetjanc believes volatility may persist, but upside potential remains limited unless resistance at $97.65 is reclaimed. "The overall setup suggests selling exhaustion could emerge, yet only a decisive move above $97.65 would warrant a shift to a bullish short-term outlook."

Previously it was reported that a sharp decline in oil prices had provided relief to Indian markets, reducing external pressures and improving overall sentiment. The current technical configuration in Brent crude suggests sustained downside risk, with $92.75 serving as an important support level to monitor in the near term.

Source of Data: XBR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.