Brent Crude : Currently undergoing a complex WXY correction

Brent Crude is currently on a bearish trend and may be approaching a demand zone with prices falling within the range of 83.5 - 84.5. It's possible that a price rebound could occur in this range, targeting levels between 87.5 and 89. However, it's worth noting that resistance may emerge at these levels, potentially leading to a subsequent downward price movement.

Currently, the market seems to be in the initial phase marked as "leg a" of Y of a corrective pattern denoted as W-X-Y. This correction could potentially find its conclusion in the price range of 78-80. Interestingly, this range closely aligns with the 61.8% Fibonacci retracement level, calculated from the low point of 71.47 on May 31, 2023, to the high point of 95.91 reached on September 19, 2023.

Comment:

Brent crude futures experienced a decline, nearing $81 per barrel on Wednesday. This marked the lowest price point in over three months, primarily in response to industry data revealing a substantial increase of almost 12 million barrels in US crude inventories last week. This surge in inventories is the most significant since the beginning of 2023.

Weaker-than-expected Chinese exports in October also created doubts about the demand outlook in the world's largest crude oil importer.

On the Technical Side : The pronounced downward movement in the price of crude oil appears to be characteristic of the third wave within a larger five-wave structure . Notably, there is a prior support level at the current price, suggesting the possibility of a relief rally towards the 83.5-84 level to complete the fourth wave. Subsequently, a further drop to the 78-79 price range is anticipated to finalize the fifth wave, of wave c of (y) of a complex (w)-(x)-(y) correction structure.