Brent has refreshed June highs early around $64.30 early on Friday but failed to extend gains and got back below the $64 handle, clinging to the opening levels. In the weekly charts, the futures remain in the positive territory, largely due to yesterday’s rally amid euphoria in the financial markets.
Today, the risk sentiment shows signs of abating after the aggressive rally. Weak Japanese manufacturing PMI fueled fresh concerns over global growth and capped the bullish attempts in the riskier assets including oil market. The PMI dropped further below the 50.0 threshold, to 49.5 from 49.8, while new orders were at the lowest level in three years.
On the other hand, the market is still supported by geopolitical developments in the Middle East and softer stance on monetary policy by major central banks. A widespread downside pressure on the greenback also plays into Brent’s hands now.
At this stage, the $64 level is in focus. A daily and weekly close above this barrier will brighten the short-term technical outlook. The immediate support now comes around $63.20 and then at $63.