Brent Crude - Oil Trading Choppy But Holding Onto Recent Gains - MarketPulse

Republished By Plato

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Better inflation outlook helps to lift oil prices
China stimulus could boost demand further
200/233-DMA a potentially big test of resistance above

Oil prices have steadied after a volatile week following the breakout from its two-month range.

The break came on the back of output curbs from Saudi Arabia and Russia, initially, but then better inflation data from the US, eurozone, and UK which could boost economic prospects.

Since then, the price has been volatile but importantly held above previous range highs. The inventory data from EIA on Wednesday triggered some choppiness but was no game-changer, while promises from China’s top economic planner to restore and expand consumption fell on deaf ears a little as they lacked significant detail.

We probably will see more of a rebound in the second half of the year as the first was a little disappointing but we need more than just words. A stronger rebound in China and softer landings elsewhere could be bullish for crude depending on what producers do.

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Can the price push above the 200/233-DMA band?

While the price hasn’t pushed on since hitting a three-month high last week, it has held onto those gains and remained above the prior range high, surviving an initial test earlier this week.

BCOUSD Daily

Source – OANDA on Trading View

If the price breaks above last week’s high, the next test could come around $82.50-$84, the 200/233-day simple moving average. It would be the first time in almost a year that it has traded above the SMA band.

Initial potential support below remains around $77-$78 where key Fibonacci retracement levels combine with the prior range high.

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Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.