Analys från DailyFX
Crude Oil Price Forecast: Counter Trend Pattern Favors Pending Upside
Highlights:
- Crude Oil Technical Strategy: Crude Oil downside expected to be limitedon price pattern
- US Stockpiles continue trend of declining despite build in gasoline and Cushing stockpiles
- Next technical Bullish trigger set at lower high from May at $50.00, support near $47.75
- IGCS Sentiment highlight: Sharp rise in short positions provides contrarian signal to look for upside
The streak of back-to-back US crude oil inventory declines since May continued on Wednesday per the Energy Information Administration. For the sixth consecutive week, Crude Oil traders were treated to the favorable news on an announcement of a 6.45m barrel draw for the week ended August 4. However, there was some unwelcome news as stocks at Cushing, OK, a US key delivery hub saw the first inventory build in 12 weeks despite the nationwide decline and gasoline imports came in at a six-year high to lift inventories by 3.42m barrels versus an expected decline of 1.56m barrels. Gasoline is derived from crude oil as it is a major product created from crude refinement.
Bullish crude traders may be disappointed that U.S. and North Korea tensions are not providing a pop for Crude Oil, but the positive effect is seen more clearly in haven assets like the Japanese Yen and Gold, which rose the most in eight weeks. Another development worth watching is the strengthening USD, which has found life in August after an encouraging employment report caused a likely unwinding of the increasingly popular short USD trade. Since Oil is priced in USD, a weaker USD is expected to bring about a higher price of oil, all else being equal.
Last, but not least, the chart pattern may show that Crude bulls should not worry about the lack of upside that we’ve seen in August, which has run counter to the commodity bull market that became the dominant theme in July. The price pattern shows a triangle, which is a pattern favorable for eventual trend continuation, but not the start of an aggressive counter trend move.
The chart below encapsulates the broad price action from 2017. What you can see to the far right of the chart is price breaking above the falling/ bearish price channel. The ceiling of that channel in relation to current price is near $47.75/bbl. If a further price breakdown occurs, I will anticipate the price breakdown halting near this zone before a bounce, and potential uptrend continuation develops. A daily close below $47.75/bbl would encourage a reconsidering the bullish bias.
Given the strong rise in Crude Oil since Q3 began,click here to see the opportunities we’re watching in Oil.
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After an encouraging EIA report, Oil turns focus to trading outside of the bearish channel
Chart Created by Tyler Yell, CMT
Crude Oil Sentiment: Net-short crude positions provides contrarian signal to look for upside
The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.
Oil – US Crude: Retail trader data shows 42.0% of traders are net-long with the ratio of traders short to long at 1.38 to 1. In fact, traders have remained net-short since Jul 26 when Oil – US Crude traded near 4869.3; theprice has moved 1.1% higher since then. The number of traders net-long is 2.9% lower than yesterday and 8.7% lower from last week, while the number of traders net-short is 2.8% lower than yesterday and unchanged from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil – US Crude prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil – US Crude-bullish contrarian trading bias. (Emphasis mine)
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Written by Tyler Yell, CMT, Currency Analyst Trading Instructor for DailyFX.com
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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
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You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
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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