Can it pause at the 50.0% fib reaction?
Brent oil continues to rally as the Trump announce the US withdraw from Iran nuclear deal (Tue). And as we discussed last week’s article, there is so far sufficient evidence to pause the rally at the resistance zone. We are watching particularly on monthly reports by OPEC (Mon) and the International Energy Agency (Wed).
Oil prices continue to close at multi-year highs even hedge funds cut bullish bets. Market participants are eyeing at 80.0$ per barrel above this, huge resistance comes at 83.00$. The price surpassed the 161.8% fe (61.60-71.35-61.58$) suggests at 77.50$ (KTM target). We feel the technical resistance level 77.90 it’s 50.0% (Feb 2012 high-April 2016 fall). A successful close above 78.00$ (rounded) could further rally to 80.00$ and 83.00$ levels.
On the flip side, support is placed at 76.30$ and 72.30$. Overall, the trend remains bullish and met all our targets expect 83.00$.
It has been moving higher for five weeks in a row. From January 2016 lows, the run last extended to five-weeks in 2016 (Feb and May respectively) and in 2017 (Aug, Oct, and Dec respectively).
Turning to the positioning, hedge funds cut their bullish bets to the lowest level in nearly five weeks, data showed on Friday, reported by Reuters.
Reuters also reported, “OPEC is more focused on identifying the right level of oil inventory at its next meeting than the impact on supplies of new U.S. sanctions on Iran, the United Arab Emirates said. “
It is important to always keep in mind the risks involved in trading with leveraged instruments.
Have a question? Let us help!
A KTM Analyst is ready to assist you, click on the comment section below