Brent Crude Oil futures rebounded sharply at the close of Wednesday’s trading session as the energy sector reacted to the drop in the US Dollar by bouncing higher. This rising price action is the first meaningful sign of strength in the oil complex since the fund liquidation began in earnest at the beginning of June, and may mark a major turning point in the intermediate term trend. Wednesday’s rally carried Brent Crude futures well above the level required to execute a technical breakout from the large Channel Down chart pattern illustrated here. The initial breach of channel resistance near $109 per barrel found heavy buying interest on very strong momentum, encouraging the likelihood of a continuation of the move to complete the pattern. Thursday’s session is likely to open with Brent Crude futures above the $112 per barrel level, with a projected price target resting between $114.36 and $121.18 per barrel as a result of the Channel Down breakout. The upper end of this forecast, if achieved, will place Brent Crude within easy striking distance of the previous high for the year, and may spur speculative buying in anticipation of a resumption of the long term bull market.

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