18 November 2022
Oil action after the market reacted to the supply cut from OPEC
The price of Brent oil continued the slight upward movement for the last month, and is currently testing the major weekly trendline which is valid since November 2020.
‘The next couple of weeks are extremely important for the price of oil since on December 1st we will have the US lay the sales tranche on the SPR (Strategic Petroleum Reserves), on December 4th there will be the OPEC meeting, and on December 5th EU sanctions on oil will kick in‘ said Antreas Themistokleous, market analyst in Exness
‘We are entering this pre-announcements period of 2 weeks, so we might see some consolidation on the price because of the anticipation of these events by the market.’
From a technical point of view, the price broke below the $92 price point and is currently trading on a very strong area of support, which consists of the 23.6% of the Fibonacci retracement level, the 50 day moving average and the major weekly trendline.
With the Stochastic indicator in the oversold levels, it’s possible to see some correction to the upside, at least in the short run, with a first point of resistance being the $95 price area just below of the 38.2% of the Fibonacci retracement, and also the psychological resistance of the round number.
If the price manages to break below the current major support area, then we might see some support around the $88 price area, which consists of the lower band of the Bollinger bands, and also a retest area of the minor daily trendline.