Another crude roller-coaster ride for oil traders

September 6, 2016

North American investors are away in observance of the Labor Day. Understandably, it has been a quiet day in FX, bond and stock markets. But for one particular market, it has been an exceptionally volatile day. Crude oil took a roller coaster ride, rising nearly 5% this morning before giving up much of those gains.

Oil prices rallied sharply this morning on reports that Saudi Arabia and Russia will make a joint statement at the G20 meeting; there was speculation that a freeze deal or something similar may be announced.

But as it turned out, the announcement was a bit of a damp squib. Russia and Saudi Arabia merely signed a joint agreement to establish a ‘working group’ in order to find ways to minimise volatility in the oil market, and there was no immediate plans to restrict crude output. What’s more, Saudi’s energy minister said that oil prices are improving and that freezing production is not the only solution.

So, uncertainty remains on the oil market ahead of this month’s unofficial meeting of the OPEC. They have talked the talk, now it is time to walk the walk. But judging by today’s events that is exactly what they are hopefully working towards with the largest oil producers finally taking some proactive steps in order to shore up oil prices.

From a technical standpoint, Brent oil remains contained inside converging trend lines, which basically means crude is in consolidation mode. The good news is a breakout is forthcoming in one or the other direction. With price action looking bullish on the higher time frames, a bullish breakout is what we are expecting to see in the coming weeks.

This can be confirmed by a sustained break above the bearish trend line and ideally above the $50.00-$50.85 resistance range.

However, if Brent moves below the bullish trend line then a deeper pullback will be likely before we see another leg higher at some point down the line. The key medium-term support range to watch is around the $42.00-42.50 level where the prior low meets the 200-day moving average.

Publication source
FOREX.com information  FOREX.com reviews

February 24, 2017
Gold surges to major $1250 resistance as uncertainty prevails
Gold surged Thursday on a breakout of its previous consolidation to hit and slightly exceed major technical resistance at $1250, a level not seen since early November...
February 24, 2017
Dollar falls as peso and gold rally
The U.S. dollar was the weakest currency yesterday as surprisingly, the Mexican peso rallied, rising 1.22% over the day against the greenback...
February 23, 2017
U.S. dollar muted to Fed minutes
The U.S. dollar index was flat yesterday after the Federal Reserve published the meeting minutes from the January 31 -February 1 monetary policy meeting...

FX Giants Rating
Exness Rating
FOREX.com Rating
OANDA Rating
OctaFX Rating
Vantage FX Rating

Porter Finance Rating
Anyoption Rating
Dragon Options Rating
24option Rating
365BinaryOption Rating
OptionBit Rating