FxPro Market Review: Oil Prices on the Verge of a Breakthrough, Testing Key Support Levels

Oil prices have Xinsheng Foreign Exchangedropped to their lowest level since the end of March, nearing a critical support level.

The price of WTI crude fell to $80.60 in Monday morning trading. A month ago, the price found support in the $80.0- $80.50 range, then accelerated higher breaking through the resistance of the upward channel. Last week's sell-off pushed the price back into this range.

FxPro senior analyst Alex Kuptsikevich noted: The macroeconomic background is unfavorable for bulls: U.S. oil inventories are rising, the number of oil drilling rigs has reached its highest level since September last year, and the International Broker Detectorry Fund (IMF) expects OPEC+ quotas to start increasing from mid-year. The dollar is strengthening, and stock indices are falling, which adds pressure on oil prices.

Oil prices are testing the 50-day moving average (currently at $80.60 per barrel). A January closing price above this level triggered a three-month rally.

The 200-day moving average is just below $79.60, less than a dollar away. Breaking below this index could signify a change in the long-term trend. Over the past two years, the market has seen significant volatility upon touching the 200-day average: either decisively breaking through it or rebounding sharply.

Recently, the 200-day moving average coincides with the 61.8% Fibonacci retracement level from the December low to the April high. If oil prices drop below $70 per barrel, it would mean a resumption of the long-term downtrend, pulling prices back to cyclical lows. If it manages to stay above the 200-day moving average, it means the Fibonacci level will extend, with potential upside targets near $100.

Therefore, the oil price trend in the coming days is worth watching by traders and investors, as it will determine the long-term trend.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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