Brent: The Downtrend Begins to Crack - Forex | PriceONN
Fundamental backdrop In April 2026, the closure of the Strait of Hormuz pushed Brent prices to their highest levels per barrel since 2022. However, diplomatic developments reversed the market’s direction: by the end of May, prices had fallen by around 19% - the worst monthly performance since the pandemic - amid ceasefire negotiations between the […] The post Brent: The Downtrend Begins to Crack appeared first on ActionForex.

A 19% Collapse, Then a Quiet Turn

Few markets swung as violently in 2026 as crude oil. In April 2026, the shutdown of the Strait of Hormuz sent Brent to its loftiest per barrel readings since 2022, igniting fears of a sustained supply shock. Then the script flipped.

By the close of May, the rally had unraveled. Prices shed roughly 19% over the month, the steepest monthly decline since the depths of the pandemic. The trigger was not a barrel of supply but a round of diplomacy: ceasefire talks between the United States and Iran drained the geopolitical premium that had inflated quotes only weeks earlier.

BRENT Technical Analysis | PriceONN
Read Analysis

Supply dynamics piled on the pressure. OPEC+ agreed to lift output by 188,000 barrels per day in June, adding fresh weight to a market already retreating from its highs. Traders, understandably, stayed defensive.

Here is the catch. Even a signed agreement may not erase the underlying threat. Risks to tanker movement through the strait have not vanished, and any hint of stalled or collapsing negotiations could pull the risk premium right back into the price. Pricing data confirms that the market is treating calm as conditional, not permanent.

Reading the Four-Hour Chart

On the four-hour timeframe, Brent (XBRUSD) has carved out a short-term downtrend that took shape after the reversal on 30 April, with the move beginning from the 114.5 region. The selling found a floor late in May around the 93 zone, a level that lined up with green support before buyers stepped back in.

That recovery is now running into a test. Price is pressing against the descending trendline and probing the upper edge of the current profile at 99.600, treating it as support rather than a ceiling. The profile itself runs between 95.400 and 99.600.

The point of control, the band where the heaviest trading clustered during the reversal phase, sits in the 96.950 to 97.150 area. Above the profile, the first meaningful obstacle is 101.800; clearing and holding over the profile would likely turn that level into the next battleground. Slip back beneath 99.600, and the point of control becomes the logical cushion for another attempt higher.

Momentum is leaning constructive. The RSI and its moving averages read 57, 55 and 49, with the indicator riding above both averages and their upward slope hinting at firming short-term bullish drive.

What Smart Money Is Watching

The deciding variable for the weeks ahead is straightforward: the trajectory of US-Iran diplomacy. Progress keeps the risk premium suppressed and favors range trading; any sign of breakdown could reignite a sharp geopolitical bid. Trading desks note that the 5 June US labour market report adds another layer, since softer or stronger employment data reshapes expectations for energy demand.

For positioning, the assets to track extend well beyond the barrel. WTI tends to move in lockstep with Brent and offers a cleaner read on US balances. The USD/CAD pair remains tightly bound to crude given Canada's export exposure, and a falling oil price often lifts the loonie's counterpart. Energy equities and broader inflation expectations also sit in the blast radius, since cheaper crude eases input costs across the economy.

The opportunity, and the risk, both live at the trendline. A confirmed break and hold above the profile would tilt the short-term bias higher toward the 101.800 zone. A rejection that drags price back under 99.600 keeps the recovery fragile and hands control back to sellers. This is a decision point, and the next clean signal will likely set the tone.

Brent Forex
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