Brent and WTI Break Their Uptrends and Put Double Tops in Play

Brent and WTI have both broken below the uptrend support lines that connected their recent higher lows, and both charts now show the outline of a potential double top pattern. The breakdown follows recent comments from President Trump suggesting further military escalation may not be necessary, which has fed a broader de-escalation narrative in crude oil. Talk of a possible deal between the U.S. and Iran sits behind that same narrative. The tension for traders is that strikes on tankers around the Strait of Hormuz continue even as the charts turn lower.

Razan Hilal, StoneX Media Market Analyst at StoneX, covers commodities, forex, stocks and equity indices through technical and intermarket analysis. That coverage gives insight into what is driving Brent and WTI, from chart structure and Fibonacci extensions to the geopolitical headlines moving energy markets.

Key Themes

• Brent and WTI both trade below the uptrend support lines that connected their consecutive higher lows.
• The XLE energy ETF has slipped back below an 18-year resistance line after a failed breakout.
• Brent is attempting a rebound from its 50% Fibonacci extension, while WTI tests its 38.2% extension.

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Brent and WTI Uptrend Breaks Expose Double Top Risk

Brent and WTI have each fallen below the uptrend support that connected consecutive higher lows, a steep breakdown that tilts both charts toward a bearish bias. The macro backdrop has shifted alongside the charts. Recent comments from Trump on military escalation are "supporting a broader de-escalation narrative and the bearish shift in crude oil charts," Hilal says. On the Brent chart, a possible deal between the U.S. and Iran lines up with a potential double top formation, while the broader double top on WTI follows two consecutive rejections near the same highs.

Brent and WTI Rebounds Test Fibonacci Support Inside a Bearish Trend

Brent and WTI are both attempting short-term rebounds from Fibonacci extension levels of a three-legged corrective pattern, with Brent bouncing from its 50% extension and WTI from its shallower 38.2% extension. WTI is reacting at an earlier point in the pattern, while the golden 61.8% extension marks a deeper reference level on both charts. Hilal ties the fundamental backdrop to "persistent geopolitical or regional tensions, with persistent strikes across the Strait of Hormuz". According to Hilal, "the broader, longer term bias remains tilted to the downside and short-term bullish rebounds within the broader bearish framework may be expected as volatility risks." [03:39]

Brent and WTI Pattern Risk Shows Up First in Daily Closes

Daily closes relative to Fibonacci extension levels show if Brent and WTI rebounds are holding or giving way within the three-legged corrective pattern. Daily oversold readings on Brent show how stretched the sell-off has become compared with earlier phases of the move. The XLE energy ETF adds a sector-wide signal, evidenced by its position relative to an 18-year resistance line and a bearish divergence from overbought levels. Notably, the previous uptrend support lines on both benchmarks now act as the dividing line between a bullish continuation and a broader bearish shift.

--- Written by Frédéric Guétin, StoneX Media Producer

--- Expert: Razan Hilal, StoneX Media Market Analyst