Oil Looks Poised For More Upside After Bouncing Off Key 100-hour MA At $69.00 Says PrimeXBT Analyst Kim Chua

By Kim Chua

Ever since the Covid-19 pandemic swept across the globe, the oil market has been on a roller coaster ride. From dropping down to zero dollars at one stage, the commodity is on the way back up, and looks set to rise even further. 

Even this week, Oil has had a roller coaster week after news about the US easing some sanctions on Iran caused oil to pull back sharply. The FOMC’s recent more hawkish narrative towards interest rates sent the USD higher, further putting a dent on Oil price, which is quoted in USD. Oil initially fell until it found support at the 100-hour MA around $69 where it found buyers

and managed to climb back up to close above $71.00 in a key show of strength. Regardless of the situation in USD, a stronger economy in the USA would increase the demand for Oil, which will inadvertently drive up its price. 

Despite the strong outlook, newsflow out of Iran in the following days and weeks could still trigger some nasty spillover onto the oil markets, with lifting of more Iran sanctions negative for oil. 

However, the bullish bias remains intact until strong support levels are broken. For Oil, important supports are at $69 and $65. Until those levels break, Oil should still inch up towards the $90 level as it is moving up in a stair step fashion which can last for a long time until its 100-hour MA is broken. Until then, I expect Oil price to be the biggest beneficiary of the political tension in the Middle East, says PrimeXBT Analyst Kim Chua.

The news in Iran will continue to have a large impact on the price of oil, and with the entire Middle East region still very much on a knife’s edge, the price may still have a lot of volatility left in it. More so, the continuing ramification of the Covid-19 pandemic will still have a role to play in the recovering global economies, and this too will shape oil prices.

But, as things stand this week, the news is more positive than confusing and all signs are pointing towards an upside; both in terms of outside factors and technical analysis. 

About Kim Chua, PrimeXBT Market Analyst:

Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.