Don’t waste your time – keep track of how NFP affects the US dollar!
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Personal areaOPEC+ shocked investors last week with its decision to prolong output cuts by 500 000 barrels a day. Besides, Saudi Arabia announced it would keep voluntary cuts of 1 million barrels a day throughout April. That actions sent oil prices soaring. Goldman Sachs and JPMorgan upgraded their forecasts. According to International Monetary Fund, such high oil prices helped OPEC+ countries to meet government expenses. Overall, everybody is happy.
The question is when oil will fall? The current high level of prices is artificially supported by OPEC+. Some criticism has risen over OPEC’s decision as analysts believe the alliance risks over-tightening the oil market. Indeed, oil demand is increasing as the whole world has eased restrictions and thus consumption has started rebounding. Airlines and manufacturing industries are getting back to work, people are traveling and driving cars more. That’s why analysts are worried that OPEC is keeping output cuts, sending prices too high, while it’s time to start increasing oil output.
UK Brent oil, XBR/USD, is moving in a nice uptrend with all the moving averages in ascending order. The RSI indicator is close to the 70.00 level, which signals the overbought area. Besides, the price approaches the upper line of Bollinger Bands, which indicates the soon reverse down as well. XBR/USD can likely rally to $75.00, 2020’s high, if it breaks through the resistnce of the recent high of $71.00. At that point, the price may lose its steam and drop.
