Oil prices continue to record significant gains after the US interest rate cut decision by 25 basis points, which came contrary to market expectations. This decision supports the upward trend of oil prices, especially in light of the continued trading above the major moving averages intersections. Oil is currently trading at $70.81 per barrel, with strong signs of continued buying momentum according to the MACD indicator, indicating the possibility of further gains in the coming period.
Technical Analysis of Oil Prices: Technical Outlook
The technical chart shows that oil is trading steadily above the short- and long-term moving averages, such as the 50- and 100-day averages, which reinforces the current upward trend. The support provided by these averages indicates that buyers are in control of the market, which reduces the chances of major price corrections in the near term.
The MACD indicator reinforces this positive momentum, as it indicates continued buying power. The MACD bullish line is above the bearish line with positive divergence, indicating that the buying pressure is strong and pushing prices towards further increases.
Indicators Expectations
- MACD: clearly indicates the continuation of the buying momentum, which enhances the possibility of a continued rise in prices.
- Relative Strength Index (RSI): is trading near the 65-70 levels, which means that there is some overbought, but it is still in a range that allows for further increases.
- Moving Averages: indicate the presence of strong support below the current price, which enhances the uptrend and reduces the possibility of a decline in the short term.
Trading strategies based on Buy/Sell level
| USOIL | In case of buying | in case of selling |
| Entry point | 71.29 | 70.25 |
| Target Point 1 (TP1) | First resistance: 72.34 | First support: 69.35 |
| Target Point 2 (TP2) | Second resistance: 73.20 | Second support: 68.20 |
| Stop Loss (SL) | 70.25 | 71.29 |
Oil prices seem to continue to rise in the coming period, especially with the positive support resulting from the US interest rate cut. Trading above the major moving averages and the continued buying power indicated by the MACD indicator opens the door for further gains. If the current momentum continues, we may see oil heading towards the $72 per barrel level. However, the main support level remains at $69.50 in case of any minor corrections.
