We have a very long bullish pinbar that revealed demand for oil at the round level 40.00. Nevertheless ADX showed zero reaction to this growth suggesting its short-term nature. The asset couldn’t break resistance 41.57-41.97 and is poised for decline to 39.50-40.00 again.
Locally the asset is balanced at the area of the middle Bollinger band (40.64-40.74). Trending activity of ADX is almost at zero level, therefore we assert a flat forecast on oil.
Strong support is observed at the merger area of the middle Bollinger band and PPZ 40.69-40.74. We could consider a rise of trading intensity in case this zone gets broken. Bears’ target would be at 39.60-39.77.
Main scenario: Flat in the 40.69-41.50 region.
Alternative scenario: Break of support 40.69 and further decline to 39.60-39.77.
Shorts from 41.50 to 40.69 and 39.77.