The commodity market is surging in early December. Brent has gained over 2% and is currently trading at $71.35.
Reasons For The Surge In Oil Prices
Investors are processing bad news from Saudi Arabia, which raised prices for January. It may mean that Saudis believe that the demand is stable and will remain stable in the foreseeable future. That's why they are not afraid to raise oil prices. It's a good signal for the commodity market.
Apart from that, a good signal for oil prices is the pause in the US-Iran talks on the nuclear deal. There might be some progress in negotiations, which may help remove oil export restrictions from Iran in the future. This week, the countries are planning to resume talks, and that's very important for oil investors.
Oil Technical View
In the H4 chart, after completing the ascending impulse at 72.86 along with the correction towards 69.50, EUR/USD is expected to return to 72.86 and may later continue trading upwards to reach 77.90. After that, the asset may start a new correction towards 73.65 and then form one more ascending structure with the first target at 81.00.
From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is growing towards 0 outside the histogram area. Later, the line is expected to break 0 to the upside and continue moving to reach new highs.
As we can see in the H1 chart, Brent has finished the ascending impulse at 72.86 along with the correction towards 69.50; right now, it is growing to break 72.90 and may later continue trading upwards with the short-term target at 76.60.
After that, the instrument may correct towards 73.00 and then resume trading upwards with the first target at 79.95. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after breaking 50 to the upside, its signal line is expected to test this level and then resume growing to reach 80.
Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.