- Continued upward journey
- Momentum appears to have stalled at 100MA(Weekly)
- Technical rebound in a bearish trend
Brent crude oil rise at the start of the week at two- month high and settled above 50MA comfortably for the first time since Oct 2018. The daily RSI is parked below the equilibrium line to 50 points.
It has continued to rally last week too, with breaking the Jan 11 high 62.50$ but facing resistance at 100MA (Weekly). Last week the price showed great respect to 23.6 fib reaction and rallied further. The way the price rebounded with higher low pattern and tiny consolidation, shows the bulls have taken the control in the near-term. It will be interesting to see if we make a clean break of $64 this or next week.
Is up for a fifth straight session and fourth straight week. What next?
The price is up for a fifth straight session and a fourth consecutive week. The run last extended to four weeks (Sep 2018) and six consecutive weeks in April and May 2018. Despite the recent rally, the RSI indicator shows that Brent oil has not entered the overbought category.
The level 63.75$-64.00$its 38.2 fib reaction is in focus for me. Any break and hold above would have me looking to the 66.00$, 68.50$ and 70.00$.
According to the latest IEA’s Oil Market Report, “the journey to a balanced market will take time, and is more likely to be a marathon than a sprint. ” The report also highlighted “there are signs that market re-balancing will be gradual.”.
Forecast: The week ahead we are going to trade in the new range 59.00-64.00$ up from 57.80$-64.00$.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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