Brent crude oil futures surged on Wednesday, hitting a fresh more three-year high of 73.07. The oil completed the third green day in a row yesterday, however, it ended the day well below its peak. Today, the price is heading lower, suggesting a potential bearish correction of the sharp buying interest.
In the 4-hour chart, the technical indicators are endorsing the downside retracement as both are moving lower. The RSI has dipped slightly lower and is developing near the overbought territory. The stochastics are also pointing downwards and are approaching the negative level.
Should the price pause its uptrend, the next support level could come from the bottom taken on Wednesday around the 23.6% Fibonacci retracement level near 70.50 of the upleg from 61.75 to 73.07. Slightly below this level, the 20-simple moving average is another support level and the price needs to drop below it before it touches the 68.90 barrier.
On the flip side, if the bulls retake control, price advances may stall initially near the latest highs at 73.07, and subsequently near the psychological figure of 74.00.
