Brent crude oil extended its rally last week and now trading above the July high of $77.50. It closed last week at $77.15 against its previous week’s close of $74.70.
Oil has broken two key resistance at $75.65 in the past week, hinting a substantial upward momentum remains in play. September 2018 high could be possible in the coming days.
At a higher time frame, the price settles above the 200MA monthly for the first time since April 2019. The last time the price traded above the 200MA monthly was in March 2018.
On the downside, $75.50 and $72.50 can act as good support. Until the oil stays above the help of $72.50, it can be approached with a bullish bias. As we noted earlier, we are on the final wave higher.
Last week’s FOMC meeting was one of the key factors that pushed the oil price further higher. Lack of hawkish surprises from the Fed supported the equities along with oil.
In case of near-term oil pullback, Federal Reserve’s tampering in Q4 2021 is the only factor that has the strength to bring the oil price down. The rest of the factors like slower economic growth and delta variant could print shallow corrections not significant.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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