The Brent crude oil price struck in a narrow range, and this week is also unlikely to feature any significant moves. The oil price is now testing a key resistance level at $63.25, its 200EA. A decisive breakout above would open further rally towards the 200MA located at $64.20 levels.
As we highlighted in our previous Commodity weekly report, potential threats remain between $63.00-$64.20 its 200MA.
On the fundamental side, expectations are building for action to be taken by OPEC+ at its semi-annual meeting on 5 and 6 December.
ING said, “We are of the view that OPEC+ will need to make significantly deeper cuts at least over 1Q20, as well as extending the deal through until the end of June 2020.”
With the lack of any significant positive triggers on the US-China trade deal, we continue to maintain a cautious stance on the Crude oil price. On Monday, the oil price again faced significant resistance at its 200EA but closed on a positive note on US-China trade talks optimism. The market traders are still awaiting direction from trade talks; it is cautious optimism capped at 50MA (Weekly).
We also expect trade to continue to remain range-bound over the coming days between $64.20-$59.60 due to lack of clarity on Trade deal and $59.60 and $59.00 to stay crucial support in the near term.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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