Weekly Commodities Review - 24 November
Concerns over the global slowdown has brought oil prices down from the highs late in 2021. Has this story now been largely priced in?
Using a simple Fibonacci retracement over the gains made from the pandemic lows of 2020 to the 2021 highs we can see how price action found some initial support around the 38.2% level, around $92, and has since threatened a moved down towards the 50% area at $78.
The long-term positive trend line has been broken in recent weeks, suggesting a possible end to the bullish momentum. But while the 50% area holds and the recent double bottom around $80 continues to hold the bulls are likely to remain optimistic that price action can build back above $100 in the coming weeks.
Seemingly putting notice on the $80 area. Strong support would be expected on any future moves towards this area, with bulls likely to remain confident of the medium to longer term outlook while this area holds. With only breaks under seen as likely to seriously dent the optimistic tone as this would immediately open up the 61.8% retracement area and Autumn 2021 lows around $64.