Trade of the Week: short Brent Crude
In this week’s Trade of the Week, IG market analyst Axel Rudolph FSTA looks to go short Brent Crude with a stop-loss at $106.40 and a downside target at $97.20. He also looks at last week’s trade, which was short EUR/GBP.
Video transcript
Good morning and welcome to this week's Trade of the Week on Monday 1st August. Last week, my colleague Josh went short euro-sterling at £0.8496, so just here.
It was an excellent trade, as you can see, because euro-sterling sold off very rapidly for five consecutive days and dumped all the way down to £0.8346. Now his downside target was around the £0.8305 mark, so we are still short on this trade but it probably makes sense to lower your take profit level to break even so that if the market were to change direction, go back up again, you wouldn't be out of pocket.
So this week's Trade of the Week is to go short as well and this time it is on Brent Crude oil. As we can see here, last week on Friday we shot up to $106.36. But we have currently come off a bit and we are in the process of forming a bearish candle.
And if you go down to a shorter term time frame, what is of interest here is that we've had a sharp reversal towards the end of last week and tried to rally again earlier this morning.
But at the moment we are seeing this bearish engulfing candle on the hourly chart. So therefore I would like to go short Brent Crude oil at current levels at $102.25 and put a stop-loss at above the highs seen from last week at $106.40, with a downside target at the 200-day simple moving average at $97.20.
So today's Trade of the Week is to go short Brent Crude oil at $102.25 with a stop-loss at $106.40 and a downside target at $97.20.
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