Trading Forex and CFDs is risky

Geo-politics support Oil prices

Market Analysis
2017-04-11_15-32-05

USOIL, Daily

On Thursday I wrote, “USOil upside trend however has begun since last week rising from year lows, i.e. 47.07. The commodity presents a bullish movement, above the 200 Day EMA at 48.70 but also above the key level of 51.00. The 4-hour chart prompted a long position due to the hold at 200-period EMA of 50.80 level several times today. Hence based on a 14 period ATR number, target was set at 52.00, which is the confluence of the 61.8 Fibonacci level. Target 2 is at 52.65.”  T2 was achieved on Friday for a net gain of 99 pips.

Crude prices have rallied some 12% in less than two weeks, which has been the longest winning streak since last August, and there are signs of rally fatigue, contributing to some long squaring ahead of weekly U.S. inventory data. Today, WTI crude printed one-month highs of $52.23 in London, and has been trading on either side of $53.00 since. Support has come from geopolitical concerns over Syria, and news that Libyan production has been cut again, with the closing of a major field, while Russia has said recently is production cuts would top 250k bpd by the end of April. On the other side of the coin, current prices continue to bring additional U.S. shale production to the market, with Baker-Hughes last week reporting the 12th straight week of increased oil rigs in operation.

Hence the commodity remains strong prompting long position from March, since it still trades north of the key 200 day moving average.  The extension of upper Bollinger bands and the positive Parabolic SAR, suggest that trend will continues moving higher in long term, while some trend corrections might occur in intraday timeframes. Hence entry was taken at 52.94, with Target 1 at 53.50 and Target 2 at 54.50

Therefore, it seems that there is a lot of upwards strength, unless commodity break below the $51.00-52.00 support zone.

Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our latest webinar and get analysis and trading ideas combined with better understanding on how markets work.

Click HERE to register the next webinar will start in:

Andria Pichidi

Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.