GBP: bullish trend under question
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OIL: three paths
Information is not investment advice
After spending the entire April in the depths below $20, WTI oil made a straight-line recovery in May. Eventually, it reached $40 on June 8 after which it went into a first serious downward retrace. Currently, it is at $40 again, and the question is how the situation will evolve.
Fundamentally, the demand for oil seems to be recovering globally – at least, that’s how OPEC sees it. That’s why $40 is likely to be eventually stepped over. The question is – when?
The most optimistic scenario (trajectory “1”) suggests that the following movement will be as straight upwards as it was during May. Although that is possible, it is not the safest assumption to rely on. The signs to look for would be decisive moves upwards during the next week. If it happens, it would mean the oil price is firmly established now above the baseline level of $40.
The moderate – and the most probable – scenario (trajectory zone “2”) suggests a gradual ascent into the channel between $40 and $47.5 throughout the next two weeks. That will be possible if there will be no bad news for oil. The higher it gets, though, the heavier it will become, and each step upwards will require more positive informational input.
The slowest (but still quite optimistic) scenario (trajectory “3”) assumes that the oil price will go into consolidation at the current level of $40 and will stay there during the next week waiting for OPEC, US, or Russia to come with more fundamental input. Eventually, it will come to challenge the resistance of $47.50 anyway, but later on.
Today’s moves may give us a clue about which of those scenarios will be most likely to happen so let’s watch oil carefully today.
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Jump in to get the technical analysis of GBP/JPY and GBP/USD!
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How to trade the gold price while it's oscillating between 1 837 and 1 864? Read the article, and you'll know how!
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