Crude Oil Consolidation :: InvestMacro

by RoboForex Analysis section

On Monday morning, the price of Brent crude oil is balanced at $113 a barrel. The commodity index remains uncertain – supply is not expanding as quickly as expected, and demand may decline as well.

China is canceling lockdowns, but that doesn’t necessarily mean the country will start increasing its oil imports right away. There are doubts about the ability of the Chinese economy to expand quickly and steadily at a time when the entire world is battling inflation and fearing a recession.

OPEC+ members are working on their pre-approved plan to increase oil production. This factor may have calmed the financial markets, but Libya is still a mess and Iranian oil won’t come to the commodity market for a while. Taken together, all these factors create a somewhat controversial basis.

On the 4 hour chart, after completing the corrective wave at 107.30, Brent crude continues rising towards 113.30 and may consolidate there later. After that, the instrument may break the range upwards and form another ascending wave targeting at 117.60. From a technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving near the dips outside the chart area, which means that it may grow to 0 and the upward trend may continue in the price chart.

As we can see in the H1 chart, after ending the bullish wave at 113.30 along with the correction down to 110.15, Brent crude rebounded from the last level. It is likely that the asset will break 113.30 and then continue rising towards 117.70. Later, the market may correct to return to 113.30 and then form another ascending structure with the first target at 119.50. Technically, this idea is confirmed by the Stochastic Oscillator: after the rebound from 50, its signal line is expected to continue moving towards 80.

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Any expectations herein are based on the author’s own opinion. This analysis may not be treated as trading advice. RoboForex assumes no responsibility for trading results based on Trading recommendations and reviews contained here.

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