The erosion of important technical threshold at 68.50$ and the key moving averages 200MA and 50MA (Weekly) at 69.50$ and 70.50$ respectively are highly encouraging. Whereas the increase of the overbought daily RSI suggests, the rally could pause in the coming days.
Against this backdrop, we focus more on the resistances at 72.20$ previous swing low, and the 61.8% fib reaction seems at 72.70$.
At last the Brent crude oil closed above the 200MA for the first time since early November 2018. On the daily chart, the Brent crude has formed a higher low higher top, which strengthens bulls further. Moreover the price gave an upside breakout through the Ascending wedge pattern, which is also a bullish sign. The initial set of resistance zone seems between 72.20$-72.70$ followed by 73.20$ December 2014 high.
“The move came after a week that brought news of OPEC+ output cuts both in terms of compliance and optimism regarding an extension. In addition, over the weekend, Libya’s UN-recognised government announced a counterattack (“volcano of anger”) on rebel leader Khalifa Haftar and his self-styled Libyan National Army (LNA) that has recently pushed towards Tripoli – the capital and the key city for the oil infrastructure. The escalation in the conflict marks another risk to Libyan supplies (that did rise in March), which could yield more support to the oil price in a week that might also bring further progress in trade talks.” According to Kristoffer Kjær Lomholt, Senior Analyst at Danske Bank.
Market traders are watching for OPEC’s Monthly Oil Market Report scheduled on April 10.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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