According to the previous forecast, Brent oil continues to recover after the fall to the line of an uptrend. Monday's drawdown was quickly redeemed the very next day, and today the rise in oil prices isn’t slowing down. The current situation is quite conducive to raising oil prices even higher to 85, and the February highs are within easy reach.
Today is notable primarily for the publication of PMI indices in most of the world's leading economies. During the day, European countries and the USA will present the statistics, and it all started traditionally with data on China. And the main driver of the global economy didn’t disappoint: PMI indices showed steady growth, which exceeded the forecasts of market participants. Figures showing the activity in the service sector set a three-year-high.
The stable recovery of the Chinese economy gives hope for the high demand for almost all commodities, primarily for — energy products. This data allows the market participants to not pay attention to another increase of U.S. oil reserves by 6.2 million barrels, which happened last week. However, preliminary stock figures rarely cause a significant reaction from traders, they prefer to wait for official data from the Energy Information Administration, which will be published today.
Forecasts of oil prices are still moderately optimistic. A Reuters poll showed that oil markets will face a short supply. It will cause the price growth above $90 per barrel in the second half of 2023. Analysts expect OPEC+ to continue the production cuts, betting on a tighter market and hoping that prices will return to $100 per barrel.
Stochastic still indicates the advantage of buyers, while the overbought zone is still far away. Thus, Brent oil can easily reach the next growth targets at 84.6 and 85.3.
We may offer you the following option of trading strategy:
Sell Brent oil in the range of 83.5 - 84. Take profit 1 — 84.6. Take profit 2 — 85.3. Stop-loss — 83.
Also, traders can use Trailing stop instead of fixed Stop-loss at their disposal.
This content is for informational purposes only and is not intended to be investing advice.