Analys från DailyFX
Crude Oil Price Forecast: Bearish Evidence Is Gathering Steam
Talking Points:
- Crude Oil Technical Strategy: price below support turns focus on history of 200-DMA bounce
- Crude Oil Still above the Trendline
- Crude Oil Sentiment Available at DailyFX+
- Crude volatility rises on Positioning Shift And Sentiment May Pressure Oil As Supply Swells
CRUDE OIL TECHNICAL ANALYSIS – Crude Oil showed volatility on Tuesday afternoon ahead of the DoE data when the API weekly print showed Crude Inventories rose 4.53M BBl last week, which further adds to the fear that oversupply is back in the Crude market despite OPEC’s efforts. The Technical focus has solely been on the 200-DMA, which has historically been a key divisor of the market between Bullish and Bearishness. The 200-DMA currently sits at 48.618/bbl as of Tuesday afternoon and price looks to be pushing lower.
Are commodity prices matching DailyFX forecasts so far in 2017? Find out here!
Chart created using TradingView
One thing that Crude Oil Bulls cannot blame the drop in Oil prices on is the US Dollar. After a dovish hike, the Fed looks set to further frustrate Oil Dollar Bulls. Now, it appears the focus is on the oversupply from US Shale that could continue to push price lower and possible to the $44/40 zone in the coming weeks if further weakness surfaces.
The price zone in focus if we continue to see price declines is the area encompassing the 38.2-50% retracement of the February-January price range that also houses the November low and the Median Line of Andrew’s Pitchfork drawn off the key pivots in mid-2015 through February. The zone is $44/$40.57. Naturally, a break back above the 200-DMA that aligns with USD-weakness (CL1 to DXY 20-day correlation is -.256) would help turn the focus higher toward the $55/57 zone.
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The price of Crude Oil recently traded below the 200-DMA with RSI(5) registering a bearish extreme. If the price pops higher as it did in April, August, and November of last year, the Bulls may feel as though they have dodged a bullet. However, the Crude Oil market does not have the fundamental support that other commodity sectors like base metals have, which could lead to an eventual breakdown toward the November low of $43.75/42.25.
The increasing oversupply, and lack of buying pressure alongside sentiment seems to favor a further drop in Crude Prices.
H4 USOIL Chart Shows the Price Possibly Set To Breakdown And Push Away From H4 Ichimoku Cloud
Chart created using TradingView
Crude Has Retail Bulls Hopeful Despite Aggressive Decline Below 200-DMA
Retail trader data shows 72.9% of traders are net-long with the ratio of traders long to short at 2.69 to 1. In fact, traders have remained net-long since Mar 01 when Oil – US Crude traded near 5424.1; price has moved 10.6% lower since then. The number of traders net-long is 4.7% lower than yesterday and 4.6% lower from last week, while the number of traders net-short is 0.4% lower than yesterday and 14.2% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall.
—
Written by Tyler Yell, CMT, Currency Analyst Trading Instructor for DailyFX.com
Key LevelsOver the Next 48-hrs of Trading as ofWednesday, March 15, 2017
For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours of trading.
Contact and follow Tyler on Twitter: @ForexYell
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
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EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
- Crude oil comment: US inventories remain well below averages despite yesterday’s build
- China is turning the corner and oil sentiment will likely turn with it
- Crude oil comment: Europe’s largest oil field halted – driving prices higher
- Crude oil comment: Mixed U.S. data skews bearish – prices respond accordingly
- Crude oil comment: Fundamentals back in focus, with OPEC+ strategy crucial for price direction
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