Weaker dollar supported demand for oil

27 January, 2017

Weaker dollar supported demand for oil. However, Brent growth was limited amid a large number of supplies and bulging inventories despite OPEC’s attempts to cut output.

Current situation

Brent extended its consolidation on Thursday. The price traded comfortably around 55.50 during the day. As we see the level is defended by sellers as any buyers' attempt to move the benchmark higher failed. The 50, 100 and 200-EMA were neutral in the 4 hours chart. The resistance lies at 55.50, the support comes in at 54.50 dollars per barrel.

MACD indicator was at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market. The RSI remained within the neutral area.

Trading recommendations

The technical picture presented a bullish tone. Our next short-term target for the oil price is 56.50, after which we see Brent extending its rise over coming days towards the 57.50 dollars per barrel.


Source  
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