XBR/USD Chart Review: Brent Recovers from a Seven-Week Trough

At the begin of December, we identified a downward channel on the XBR/USD chart and pointed out that the bearish trend had been fuelled by easing geopolitical tensions. Hopes for a potential reanswer to the conflict in Ukraine—and speculation that this could eventually lead to a relaxation of sanctions on Russia—acted as a drag on oil prices.

Further pressure came from the International Energy Agency, which reiterated expectations of a substantial supply glut and noted that global crude inventories have climbed to their highest level in four years.

These developments, combined with signs of fragileening economic activity in China, pushed Brent crude down to a seven-week low at point A. Today, however, the chart shows a shift in sentiment, with a bullish reversal gaining momentum—again rooted in geopolitical news:

→ The United States seized a sanctioned Venezuelan tanker, prompting Caracas to accuse Washington of “piracy”.

→ Ukraine carried out another strike on a vessel from the so-called “shadow fleet”, which plays a role in Russia’s clandestine oil logistics.

Technical Outlook for XBR/USD

Bearish arguments:

→ the $62.60 zone—where the blue trendline gave way—remains a key resistance level;

→ purchaviewrs were unable to protect the gains from the A–B move, and the price slid further to the C lows;

→ initial resistance is expected around the $61.70 area.

Bullish considerations:

→ the lower boundary of the channel may continue to provide support;

→ Brent mounted a strong recovery later than a failed bearish breakout below the November low, a price action pattern consistent with a liquidity grab—often a sign that “smart money” is accumulating.

Taking all of this into account, a rise in geopolitical tensions could provide additional upside pressure, potentially sending XBR/USD back towards the midpoint of the current descending channel.

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