4-hour timeframe
Over the past two trading days, oil quotes have dropped significantly in value. However, most experts believe that this is a temporary phenomenon and nothing more than a correction. Donald Trump is blamed for the collapse of oil, who recently turned his attention to the oil market, momentarily forgetting the trade war with the EU and China. Now Trump believes that OPEC should increase oil production and lower prices. It is to this statement that the market reacted by selling. However, these are just words that do not yet correspond to concrete actions. Especially since OPEC will unlikely obey Trump. Meanwhile, the number of drilling rigs in the United States have dropped to an annual low. Oil production in the United States may fall in the near future. Problems with oil supplies from Libya and Venezuela can also form a shortage of "black gold". Plus, we should not forget about Iran, whose exports have recently more than halved. All of this suggests first of all that the rise in oil prices could resume in the near future. The correction was, Trump's words were fulfilled by the market, and the general trend in the oil market was a decline in production. Thus, the turn of the MACD indicator upwards will be the first signal for a possible resumption of the upward trend.
Trading recommendations:
At the moment, the #CL instrument is in a downward movement, but we expect the upward trend to resume with targets of around $68 per barrel. The upward turn of the MACD indicator will be a signal to reduce short positions.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dotted line.
Chikou Span - green line.
Bollinger Bands indicator:
3 yellow lines.
MACD Indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com