If you are an investor in oil-dependent economies, trade or plan to trade in oil-rich countries then the fluctuations in oil prices is a risk indicator that you should probably be aware of particularly, if you are investing or trading in oil companies.
This article will look at the long term technical analysis of potential oil price movements using Brent Oil CFD as a reference.
As of April 8th, the price of Brent is around $32.
After plunging from a high of around $60 in mid-February, it has been swinging around $25 to $35, levels it last saw in 2016.
In the long term, at least for now, the monthly chart shows that oil is in a downtrend. This can be seen in the formation of lower highs (red lines) and lower lows (purple lines).
The current level is around the resistance seen in 2000 to 2004 and the support in 2016. A decisive move above current levels may see prices going up – for a while.
Should prices fall though, we may see $20 levels again.
Brent weekly chart shows an immediate resistance of around $35 followed by $45 and $50, $60 and $70 (green lines).
Prices will however need to break the downtrend line (black line) to successfully reverse into an uptrend.
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