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Andreas Zanin
Analysis | March 9, 2021

KTM Commodity Weekly: Continues to eye a key medium-term resistance level-update

We all know the volatility of Brent, but the execution this time is stunning. Since April 2020 low, it’s been a very, very good piece of ride by Brent crude oil and judged it well for great returns. We knew that was coming, and the targets we loved passed behind us.

On Monday Asia morning, Brent crude oil price reached a new high after Saudi Arabia said that one of the world’s most secured storage facilities came under attack. As a result, Brent rallied to $71 at the start of a new week.

Closing is better than starting: Even though the price pops to $71 initially, Brent oil price completely lost the fire at the end of the day, closed at $67.70, -2.30% down. Even last Monday, March 01, the price falls nearly 4%, the most since October 29, 2020, to close at $63. There were two factors behind the overnight’s selling. 1. Unaffected oil supply 2. Strong US dollar.

ANZ commodity report said that “The terminal is capable of exporting 6.5mb/d, or 7% of the world’s demand.”

After the market clarifies the unaffected oil supply, prices started to crawl back slightly into the end of the Asia session. But the selling grew thicker on the back of a strong US dollar.

Past two weeks, price action paused at the 100MA on the monthly chart. The near-term trend tilted in favor of cautions from bullish.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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