Crude Gives Back Some of Yesterday's Gains
Joe Perry September 17, 2019 9:05 PM
The market gave back a portion of gains as bearish comments trickled out.
After yesterday’s breakout in Crude Oil, closing up near 14%, the market gave back some of those gains as bearish comments trickled out throughout the day. Earlier in the day, Saudi sources reported that Saudi oil output will return to normal levels quicker than initially assumed. Later towards the close, a Aramco source said that Abqaiq processing plants be at normal capacity by the end of September. Light Crude Oil Futures closed down roughly 5.5% today as price briefly touched support at the highs from September 10th, trading as low as 58.50. However, trading at a prior high does mean that the gap in Crude Oil has been filled. In order to fill the gap, price must reach the prior price from before the gap at 54.58, which in this case is Fridays close.
Source: Tradingview, FOREX.com, NYMEX
The 58.50 low in Crude Oil also marketed support at the 38.2% retracement level from the low on August 7th to yesterdays highs.
Source: Tradingview. FOREX.com. NYMEX
Support below arrives at the previously mentioned days lows and 38.2% retracement at 58.50. Next support is near 57, which is the 50% retracement and horizontal support. Below that support is 56.20, which is the 50 Day Moving Average and Trendline Support (see Daily chart above). Horizontal resistance comes in at 61.50, Next resistance is yesterday’s highs at 63.38.
Tomorrows price action in Crude Oil can still be volatile as more comments are released regarding the attacks. On a separate note, the much anticipated FOMC rate meeting is also tomorrow. Watch for comments in the statement and the Q&A regarding China, growth, and a global manufacturing slowdown. Any comments in these areas many also move the price of Crude Oil.
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.