Oil stabilized after a sharp weekly drop as markets weighed the possibility of a Russia-Ukraine peace deal that could add even more supply to an already well-supplied market. Prices have been sliding for months due to rising global production and expectations of a record surplus in the coming year. A potential agreement that leads to sanction relief for Russia would increase the oversupply even further, although political hurdles remain, and European leaders are pushing for revisions to the peace framework. Traders are also watching Middle East tensions and softer near-term market tightness, while OPEC and its partners prepare to review output strategy later in the month.
On the technical side, the crude oil price is testing the support of the lower band of the Bollinger Bands around the $58 price area. The Stochastic oscillator is in extremely oversold levels, hinting that a bullish correction may be forming, while the Bollinger Bands are quite expanded, indicating that volatility is present to support any sharp moves. On the other hand, the moving averages are validating an overall bearish trend in the market, and therefore any bullish correction might be minor. In the event that the price does indeed correct to the upside, the first area of potential resistance may be seen around $60, which represents both the psychological resistance of the round number and the 38.2% Fibonacci retracement level. If, however, it continues its bearish trajectory, then it might retest the lows of $57, which was tested again in late October.
Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness
On the technical side, the crude oil price is testing the support of the lower band of the Bollinger Bands around the $58 price area. The Stochastic oscillator is in extremely oversold levels, hinting that a bullish correction may be forming, while the Bollinger Bands are quite expanded, indicating that volatility is present to support any sharp moves. On the other hand, the moving averages are validating an overall bearish trend in the market, and therefore any bullish correction might be minor. In the event that the price does indeed correct to the upside, the first area of potential resistance may be seen around $60, which represents both the psychological resistance of the round number and the 38.2% Fibonacci retracement level. If, however, it continues its bearish trajectory, then it might retest the lows of $57, which was tested again in late October.
Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.