- Oil prices eased on mini-trade deal between the US and China
- Supply-demand issue takes a back seat, Global growth concerns surfaces
Brent crude oil broke its three-week losing streak posted a healthy gain last week. The price bounced up to $60.45 on Friday, but lowered on Monday, traced out a double top pattern formation. We expect dips to the 200MA (Weekly) level and parallel support located at $57.15 to continue to draw bargain hunting, as we have seen the case for the past two weeks and mid-August as well. Whereas, upside should be capped at $60.50 its 20MA.
The price may fall into a range of 60.50 and $55.70 identified as a double bottom.
It’s possible to make the case that Brent oil has now entered a consolidation phase. If that’s the correct interpretation, everything since early October should be considered within the context of a technical bounce. The bottom of the range is located at $57.15 and $555.75. Breaking lower than $55.70 would further confirm the broader downside bias and open up the possibility of $50.75 and $50.00 levels.
The relative strength index (RSI) indicator is not showing any strength, suggests a consolidation phase, whereas the oscillator has been bullish. If it starts moving higher, watch out for $61.80 and $63.00 levels.
Oil traders are waiting for clues, US inventory data to be released tomorrow. Last week’s mini-deal between US-China has been keeping the cap on prices besides global growth concerns is over the surface.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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