Brent remained strongly bid

22 February, 2017

Oil prices rallied on Tuesday after OPEC Secretary hinted at more cuts.   

Current situation

Brent remained strongly bid on Tuesday, despite broad based US dollar strength. After a night consolidation around 56.00 the price jumped upwards in the European morning. The benchmark rallied through 56.50 and posted a session high at 57.30 dollars per barrel. Buyers did not find any reason to move higher and stopped. After posting a fresh high the price pulled back. According to 4 hours chart the 50-EMA crossed the 100-EMA upwards. The price continued developing well above the moving averages. All the moving averages pointed higher. The resistance lies at 57.50, the support comes in at 56.50 dollars per barrel.

The histogram grew which is a buy signal. The RSI indicator is near overvalued territory, favoring a new move higher.

Trading recommendations

Sustained break above the 57.50 region is seen as minimum requirement needed to confirm bullish resumption. Once we break above the 57.50 hurdle, we think that the 58.50 level will be next. Meanwhile, we do not exclude a minor correction towards 56.50 dollars per barrel.


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