Summary:
- Output cut agreement may be extended until the end of the year
- Both grades of crude added to previous gains
- No risks to the upward trend seen over the short term
The previous week was marked by more gains on the oil market. Upward move seems to be fuelled by reports saying that the OPEC+ group may decide to prolong the output cut agreement into the second half of 2019. On the weekly interval, Brent (OIL) moved towards the 61.8% Fibo level of the late-2018 slump and local lows from August.
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Source: xStation5
Moving onto a daily frame, one can see that the area marked by the aforementioned 61.8% Fibo continues to be key price zone. Moreover, range of the inverse head and shoulder pattern painted at the turn of 2018 and 2019 can be found there. Having said that, one cannot rule out a situation that bears will become more active in this area. Nevertheless, the situation still bodes well for buyers in the short term and 200-session moving average as well as the channel of 50-session moving averages should serve as the nearest support levels.
Source: xStation5
Situation on the H4 interval also seems to support bulls. However, in this case the $68.2-68.5 area could be the first stop in case bears start to dominate. Additionally, the upward sloping trendline runs in the area, what should constitute another hurdle for sellers as it has limited downward moves a few times already.
Source: xStation5
