FXStreet (Delhi) – Research Team at Societe Generale, notes that the Brent is extending the down move after breaching below the advocated level of $35, 2008 lows and also a horizontal support consisting of 2000 highs. Key Quotes “It is quite common to witness extended down moves in last leg of downtrends, which are associated with frenzy selling. Brent appears to be currently in that state and is approaching near a significant graphic support zone at $27.25/$25.00, the massive descending channel support drawn from 2008 highs which intercepts 2003 lows and 1997 high. Monthly indicator RSI is probing a multi-decadal support but is still anchored within negative and oversold territory, which shows stabilization signs haven’t emerged yet. Thus, it would take Brent to re-establish itself back above $35 to suggest the sell-off is ebbing. Focusing on short-term charts, Brent March’16 contract has been undergoing a steep down move post break below $35.00, as highlighted by the down sloping channel ($29.70-$25). Within this regain of bearish pressure, corrective pullbacks have been short-lived, restricted by the daily Moving Average (at $35.00) and barely retraced between 23.6% and 38.2% of the previous down moves. Currently, and more importantly after probing the aforementioned level of $27.25/25.00, Brent is forming a probable daily hammer pattern. A hammer does not necessarily constitute a reversal per say but rather a short-term pause or breather within the exiting trend. Daily indicators, here RSI, depicts exacerbated down trend which sometimes result in oversold conditions. Indeed, the indicator is hitting a 1-year floor hence suggests $27.25/$25 to act as an immediate support. Ability for Brent to break above $29.70/30.40, the steep descending channel will confirm the hammer pattern and open the way for a short-term rebound. In that case a pullback towards $32.50 and perhaps even $35 is not ruled out.” For more information, read our latest forex news.