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Brent oil prints low below $40 on falling prospects of production freeze

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Brent prices fell to $39.78 levels after reports hit the wires that the planned OPEC and non-OPEC meeting may be cancelled due Iran’s reluctance to agree to production freeze.

    Back above 5-DMA

    Prices are back above 5-DMA located at 40.04 levels. Oil rose to fresh 2016 high this week on optimism major producers may reach a production freeze accord at Jan 20 meeting. In fact, traders ignored the data released in the US, which showed stocks at record highs.

    However, the latest report is a reality check to the markets. Moreover, Iran has repeatedly said that it is no mood to freeze production and actually called the strategy ridiculous a few weeks back.

    Brent Technical Levels

    Futures currently trade around $40.15/barrel. The immediate hurdle is seen at 40.73 (50% of Aug 31 high-Jan low), above which prices could re-test 41.14 (previous day’s high). On the other hand, a break below 5-DMA at 40.04 would shift risk in favor of a drop to 39.29 (Mar 29 low).
    For more information, read our latest forex news.
     

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