Brent crude oil is trading above 200MA (Weekly) and 50 MA (Monthly) standing at $57.70, one can opt a neutral stance from bearish. The price found solid support from week’s low, which could be a vital support in the near term. The near-term trend remains in a narrow range between 61.20-55.75 levels. The inability of the oil price to sustain above the critical resistance of 61.25 could be a negative indication for the bulls.
Flipside, a substantial move above this crucial hurdle could only bring bulls back into action. Otherwise, one more leg of sharp weakness is likely and immediate support to watched at 57.40 and $55.70 levels.
View: As long Brent is trading above the key moving averages, one can wait for a decent bounce to towards the critical resistance level in the form of short-covering.
As the US-China trade fears ease, one can opt a buy trade with a strict stop loss. Turning to the daily indicators, the daily RSI has been making higher low pattern and oscillator is remaining bullish.
Turning to the fundamental side, Gulf tension return could help the oil prices to hold recent low. On Monday session, oil climb after a drone attack on Saudi production field over the weekend.
According to ING, “Yemen’s Houthi rebels claimed responsibility for the attack. A fire was extinguished at a gas processing plant, however the attack has reportedly had no impact on production at the field. The field is able to produce around 1MMbbbls/d of crude oil.”
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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