Brent oil has continued to fall this week, too, with breaking the 50.0% fib reaction and parallel key support $55.80.
Let’s look at the final tally on the oil market on Monday- Brent fell $1.50 to $53.20. The price has been falling six straight weeks, followed by five consecutive weeks of gains. It has lost the 200WMA and settled below the key moving average, which is a significantly bearish factor in the oil price. The momentum is clearly to the downside and could continue if the coronavirus headlines hit the wires again.
Remaining below its 200WMA, we may see more downside risk towards $52.50 and $50.00 levels. The corrective wave pattern suggests it might fall to $51.70. It will be interesting to see if we make a move to $50.00 levels. It seems like that’s the direction we are going.
Now oil prices are at the lowest levels in fourteen months. The daily RSI located at 24, which is an oversold indicator, whereas the oscillator has been remaining bullish. Based on the RSI indicator oversold condition and a bullish oscillator, we wait for a better buy trade opportunity (meaningful rebound).
Traders awaited a decision by OPEC to balance the oil markets.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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