A correctional movement is developing in the oil market, after prices have updated the annual lows. Many investors started to fix short positions, which contributes to the development of a retreat.
Stock exchanges situation also provides additional support to the oil prices. Despite the deadly coronavirus spread reports, major stock indexes have shifted into the green trading zone. The positive macroeconomic statistics and corporate reports of the largest US companies have driven the growth. Oil is a risky asset, so the growth of indices generally has a beneficial effect on the oil prices dynamics.
The market today will be focused on the OPEC+ technical committee meeting which will touch upon the issue of a possible reduction in production quotas due to a sharp decline in energy demand..
Regarding the chart, the price reached the previously noted resistance level of 52.00. The bulls could not overcome this mark, so from the current positions we can expect further downward movement. The target is the level of 50.60.
Resistance levels: 52.00, 53.10, 54.00
Support levels: 50.60, 49.70, 49.00.
The main scenario - a decline to 50.60.
An alternative scenario - a breakdown of resistance at the level of 52.00 and an increase towards 53.10.
The fundamental outlook is moderately negative. We consider shorts from the level of 52.00.
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