Oil is moving higher today, following an up day on Friday. This follows a report in the Financial Times suggesting that Saudi Arabia will extend its current output restrictions until the spring, whilst other OPEC members consider further cuts. The FT article, citing unidentified people familiar with the discussions, submits that OPEC is unhappy about the current trend of declining oil prices and the humanitarian conditions in Gaza. OPEC is due to meet in Vienna on 26 November.
The last two days of gains (current candle still to complete), sees FXCM's CFD for Brent, UKOil, move into the neutral area between the two blue bands. This is a move from the bearish area between the lower blue and red band and is considered a show of relative strength.
Nevertheless, the RSI momentum indicator is yet to cross above 50, into bullish territory (green rectangle). As such it is difficult to tell if the current move is sustainable or merely a rally in a downtrend. There is a resistance area at $84, which has seen price reactions in the past. If the RSI is unable to move above 50, this level may prove to be a key reaction level once again.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.