Brent crude futures remained trapped near $88.42 on Monday, confined to a narrow $87-$90 range as technical indicators signaled waning momentum and indecision among traders.
The contract, which has struggled to sustain gains above $88.50, faces a cluster of resistance between $88.50 and $90.00, with the 200-period simple moving average at $82.31 providing a bullish baseline. Volume profile analysis indicates the point of control sits just above $88.50, while the Ichimoku cloud spans $84.09 to $87.25, reinforcing the sideways bias.
Technical gauges reflected limited directional conviction. The Average Directional Index (ADX) stood at 15.73, a level typically associated with trend exhaustion, while a recent doji candle and shrinking volume compounded the lack of follow-through. A bearish moving average convergence divergence (MACD) crossover further suggested fading upside momentum.
Traders outlined four primary scenarios based on key levels. An aggressive bullish stance targeted a bounce from $87.25 with a stop at $83.25, aiming for $89.00, $91.50, and $94.00—a potential risk-reward ratio of up to 4.5:1. A more conservative approach favored entry near $85.20, aligned with the SuperTrend indicator, with identical upside targets and risk parameters.
On the downside, a decisive break below $89.00 could prompt aggressive short positions targeting $85.00, $82.30, and $79.00, offering a 5:1 risk-reward ratio. Alternatively, a conservative fade strategy looked for a breakdown through $87.00, with a stop above $91.00 and similar downside targets.
The session’s price action underscored the tug-of-war between supply near $90.00 and demand around the $87.00-$88.50 zone, leaving the broader trend unresolved.
