Oil closing OPEC+ gap!

By Tomasz Wisniewski|

Published: April 26 2023, 13:37 GMT+0

Oil closing OPEC+ gap!


In today’s technical analysis, I will talk about Brent oil. We can see that this instrument is going down heavily, but that is not the main reason I am analyzing oil today. The main reason is that, just now, the price managed to close the gap created by the OPEC+ production cut at the beginning of the month.

After the gap was created, the price was moving pretty much sideways. Back then, in many analyses, I claimed that most probably, the price shall not rise further, but will more likely close this gap. Why? Well, first of all, gaps love to be closed and, secondly, we were below the key resistance of 86.7 USD/bbl (orange).

On April 12, oil managed to break the resistance, which was quite surprising. Luckily for the bears, it was just a false breakout and just afterwards, the price declined sharply. There was a combination of two very trustworthy and reliable technical factors: a false breakout and gap closing. Both of them were supporting the decline.

Now that the gap is closed, what’s next? Very often after closing the gap, the price reversed and traded in the direction of the gap, i.e. up in our case. I would be careful about it though. A buy signal is possible but, in my opinion, only after the price breaks the orange resistance. Chances of that now are rather limited.

Source: https://www.axiory.com/analytics/technical-analysis/oil-closing-opec-gap