Oil rally has stalled but could be resumed

OANDA:BCOUSD   Brent Crude Oil
Brent crude gained 2.2% last week and registered fresh four-month highs marginally above the $68 handle. The barrel failed to confirm a break of this level but remains elevated, having settled above the $67 figure on Monday.

The general sentiment in the market remains positive due to a combination of factors including OPEC-led supply cuts, US sanctions on Iran and Venezuela, supply disruptions, signs of slowing activity in the US shale fields, and a weaker dollar.

This week, the FOMC meeting will be in focus with most investors, citing the latest comments by the officials, expect the central bank to sound dovish, which could lift risk sentiment further and put the dollar under additional pressure. If so, Brent may receive some support and make fresh bullish attempts from the current levels.

Also, the market will be traditionally affected by fresh inventory and output data from the US. Further decline in stockpiles would be market-positive, as well as fresh signs of progress in the US-China trade talks.

Technically, Brent needs to regain the $67.70 handle to target the $68 barrier once again.