Oil's bounce looks strong but extended continuation questionable

The situation for oil is quite different from gold in most respects, the main one being the overall downtrend. This accelerated earlier this week as OPEC+ announced that some voluntary cuts would end in October while other compulsory ones would continue into next year: the net result is more daily barrels coming to markets from around the middle of December.

That’s why the bounce on 5 June seems to be primarily technical. It’s generally rare for oil to move more than 4-5 consecutive days in the same direction unless there’s a really strong fundamental driver for that, so some degree of bounce here was expected. The price remains oversold based on the slow stochastic. In the short-term, $76 might flip to be a resistance. Another sharp move down immediately is unfavourable unless there’s a very surprising NFP.

This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.