Oil Approaching Key Re-test Zone Amid Market VolatilityOil prices are currently approaching the re-test zone between $82.40 and $82.90, indicating a potential continuation of the uptrend. For those already in the market, it's advisable to seek sell opportunities in line with your trading strategy.
For instance, if you trade using Supply and Demand principles, identify supply zones around this range. Once the market tests this zone and it holds, look for buy signals as confirmation of the continuing uptrend.
Crude oil futures are holding above $80 per barrel ahead of summer energy demands, driven by factors such as geopolitical risks in Europe and the Middle East, and the threat of a hurricane in the Caribbean. Traders are also weighing the impact of demand uncertainty and production decisions by OPEC+.
Oil initially dropped earlier this year after OPEC+ announced production cuts, but prices have since rebounded. The recent move up is partially due to summer demand expectations and inventory draws, which could push Brent crude back into the high $80s to $90s range.
Given these dynamics, a significant drop in prices is unlikely. Therefore, it's crucial to monitor for sell setups towards this re-test zone and then prepare to capitalize on the anticipated upward momentum. There is potential to capture substantial moves towards the upside, with prices possibly heading towards a new high of $85 per barrel.
