Brent Crude Looks long-term Bearish – Action Forex

Oil prices dipped slightly on Thursday after reaching multi-month highs the previous day. Brent crude dropped to $81.66 per barrel, while U.S. WTI crude fell to $79.69. These declines followed substantial gains on Wednesday due to falling U.S. crude stockpiles and new U.S. sanctions on Russian oil. The U.S. Energy Information Administration reported a larger-than-expected two million-barrel drop in crude stocks, tightening the global supply outlook as Russia’s key customers scramble for alternatives.

The Biden administration introduced more sanctions targeting Russia, increasing shipping rates and supply concerns. However, OPEC+ will likely stay cautious about raising output despite recent price hikes, as they’ve faced challenges maintaining stable optimism over the past year. On the demand side, global oil consumption grew slightly at the start of 2025, supported by increased travel for festivals in India and Lunar New Year celebrations in China. Some investors also watch for possible U.S. interest rate cuts in 2025, boosting economic activity and energy demand.

XBRUSD – D1 Timeframe

A basic understanding of market structure teaches that a break of structure is often followed by a retracement—a scenario that is obviously playing out at the moment on the daily timeframe chart of XBRUSD. The retracement move approaches a key Fibonacci retracement level, with the confluence from the trendline resistance and the Fair Value Gap (FVG).

XBRUSD – H4 Timeframe

On the 4-hour timeframe, we see price trading within the range of a rising channel as it climbs towards the supply zone, trendline resistance, and Fibonacci retracement level confluence. The expected reaction from the confluence zone is bearish; however, waiting for a break below the trendline support of the channel provides much safer entry criteria.

Analyst’s Expectations: