Like stock markets, oil has enjoyed a good week thus far, but it is hardly surprising to see it stall as the UK’s referendum draws near. The $51 level is capping gains for now, but could see a breakout to $53 and the highs from early June for Brent.
It would take a move back below $50 to negate the currently bullish outlook, and in which case we would look to see if the price can test the 50-day SMA at $47.52.
The rally here remains intact, with yesterday’s dip bringing out fresh buyers. Crucially, the price fell back to test $50, and then rallied off this level. Arguably we are now looking for a return to the June highs around $51.60.
For the time being dips may well find fresh buyers, although as the UK’s vote looms this market, like many others, may see decreasing volumes as traders look to cut back on risk. We would need to see a move below $48, the key support from late May and early June, to alter the current bullish outlook for WTI.