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Brent oil – Gains capped by demand worries

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 9, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Brent futures are trading on a front foot, just a shy away from $39.00 handle but gains are being capped by concerns over falling demand and strong dollar.

    Recovers from near 5-DMA levels

    The bearish momentum ran out of steam as prices neared 5-DMA stationed at $39.23 levels. Analysts say falling US output is supporting prices. However, horrible China data released yesterday triggered concerns regarding falling oil demand.

    Meanwhile, a 0.20% rise in the USD index is also making it difficult for the futures to retake $39 handle. Traders now await the US government weekly inventory data release.

    Brent Technical Levels

    The immediate hurdle is seen at $40.45 (falling trend line resistance on daily chart), above which futures could target 41.02 (Mar 7 high). On the other side, support is seen at 39.23 (5-DMA), which if breached shall open doors for a slide to 38.07 (Dec 24 high).
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