New sanctions against Lukoil and Rosneft by the USA pushed oil up recently as traders worried that threatened secondary sanctions on banks working with these companies could disrupt supply to China, India, and other importing countries. While this has alleviated recent concerns about significant oversupply, the medium-term effects are not yet clear.
$54.75-56 seems to be confirmed as an area of support on the weekly chart, with 17-20 October having been the third unsuccessful test. The crossover of the slow stochastic in oversold and a clear break above the 20 SMA might normally be a strong buying signal, but volume doesn’t clearly support the bounce yet.
The 50 SMA from Bands, which is currently being tested, appears to be an important short-term dynamic resistance. Confirmation of more gains might come from a daily close clearly above $62. Beyond that, the 200 SMA, just below $64, is likely to be a strong resistance from which a breakout would probably require a significant uptick in buying volume.
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This article was submitted by Michael Stark, financial content leader at Exness.
The opinions in this article are personal to the writer; they do not represent those of Exness. This is not a recommendation to trade.