KTM FX Weekly: Shifted to consolidation phase

The Brent crude oil has reaffirmed support since last week. The price has been well supported at $54.50 in recent sessions, and a break below this level may pave the way for lower prices back to $53. On the upside, the trend is supportive, but the market needs to close above the strong resistance zone between $57.50 and $58.60.

Oil prices fell for the second straight week lower for the first time since October 2020 as renewed COVID-19 lockdown restrictions raise fresh demand concerns. With the vaccine rolling out demand, looking beyond the near-term risk could normalize late 2021 to early 2022.

The recent rally from $50-$57 was primarily inflated by Saudi Arabia’s surprise voluntary production cut of 1m barrels a day in February and March.

Area of resistance defined by the following:

• The Weekly 200EA located at $56.25 and 200MA located at $58.60
• The monthly 50MA finds at $58.20
• The 2-year trendline finds at $58.

Any minor corrections will attract buyers as the weekly A-B-C pattern suggest $63 is the next immediate target.

View: Until the price stays above the support zone of $50.50-$49, it can be approached with a bullish target at $60-$63.

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

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