Crude is Quietly up 1%
Joe Perry October 9, 2019 11:03 AM
Crude oil is sensitive to trade related headlines.
As the markets patiently await the next headline regarding the US-China trade talks, WTI Crude Oil is quietly up 1% at 53.20 since the open, down from earlier levels at 53.63. Crude oil is sensitive to trade related headlines. The oil market is taking the view that better trade relations between the US and China equals a pickup in manufacturing, which in turn, equals more demand for crude oil. Talks overnight have picked up slightly with China saying it will agree to buy $10 million worth of soybeans.
After retracing 61.8% of the move from the October 3rd, 2018 highs to the December 24th 2018 lows, WTI Crude has been in a large trading range, primarily between 53.25 and 63.75. However, since September 13th, price has been moving lower and last week tested the 61.8% retracement level from the highs on April 23rd to the lows on June 5th at 51.40, for the 4th time! Each time price tested this level it bounced.
Source: Tradingview, FOREX.com
On a 240-minute chart, one can see clearer how price has been drifting lower since to September 13th highs. Price briefly broke out of the bottom of the channel and traded down to 51.06, putting in a daily hammer candlestick formation. This is considered to be a 1 candle reversal pattern. As we see so often, once we fail to break out of one side of a channel, the other side is often tested. That was the case here, as price moved to the top of the channel and put in an evening star formation, which is a 3-candle reversal formation candle. However yesterday, price broke back out of the top of the downward sloping trendline and is currently trading above it today.
Source: Tradingview, FOREX.com
First resistance level is previous highs and horizontal resistance at 54.01. Above that there is horizontal resistance at 54.85. Third level of resistance is the 38.2% Fibonacci retracement level from the previously mentioned timeframe at 55.78. Support is back at the breakout of the channel near 52.80. Next support level is was down at 51.06, spike low on October 3rd.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.