Oil Is About to Update Its Highs

Early in the last week of September, the commodity market continues sparkling with optimism. Brent rose to $79 and may well attack $80.

The key support factor is market expectations of a stable demand for energies in the future. In particular, it’s the report from the International Energy Agency, which says that the need for energies in the fourth quarter of 2021 will be higher than in the third one. If to be more precise, the major hike in the demand is expected in October.

Some more support comes from the news: in August, India’s oil import added 15.8% m/m if compared with July.

The strong “greenback” doesn’t keep oil prices down at all – bulls are looking more motivated than usual.

In the H4 chart, after forming another consolidation range around 76.06 and breaking it to the upside, Brent has reached the next upside target at 79.00; right now, it is consolidating there. Possibly, the asset may start a new correction to return to 76.06 and test it from above. Later, the market may form one more ascending structure with the short-term target at 81.08. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving upwards within the histogram area, thus implying a further uptrend on the price chart.

As we can see in the H1 chart, Brent continues growing towards 81.15. After completing the ascending wave at 77.22, forming a new consolidation range around this level, and then breaking it to the upside, the asset has reached the short-term upside target at 79.02. Possibly, the asset may form another consolidation range around 79.00. If later the price breaks this range to the downside, the market may correct to return to 77.22 and then resume trading within the uptrend with the target at 81.15. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after breaking 80, its signal line is moving to break 50 and continue falling to reach 20, thus implying the correction on the price chart.

Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.