USOIL price is moving in a sideways movement for the last 7 sessions and has yet to cover the gap created in early April after the surprise cut by the OPEC+ of more than a million barrels daily starting from May to the end of 2023. The investors that were bearish are questioning the demand outlook after the production cuts while the bulls are awaiting for the cuts to kick in to increase the price of the “black gold” in the second half of the year. Adding to tightness in supply has been a shutdown of Iraq's northern exports. A deal was signed last week to restart the flows, but they hadn't resumed yet.
From the technical standpoint the price is trading in a sideways channel for the last seven sessions while the Stochastic is recording overbought levels in the market. The area of 80 - 81 is proving to be a strong resistance level since the price failed to break above it since early December 2022 after testing it for a total of 6 times in this time period. In the case of a correction to the downside as we approach the production cuts month of May we might see some support around the 76 area which consists of the psychological support of the round number , the area of the 50 & 100 moving averages and also just below the 23.6% of the weekly Fibonacci retracement level.
Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness.
From the technical standpoint the price is trading in a sideways channel for the last seven sessions while the Stochastic is recording overbought levels in the market. The area of 80 - 81 is proving to be a strong resistance level since the price failed to break above it since early December 2022 after testing it for a total of 6 times in this time period. In the case of a correction to the downside as we approach the production cuts month of May we might see some support around the 76 area which consists of the psychological support of the round number , the area of the 50 & 100 moving averages and also just below the 23.6% of the weekly Fibonacci retracement level.
Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness.