Analys från DailyFX
Crude Oil Price Forecast: Crude Breakout to 2016 Highs
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Talking Points:
- Crude Oil Technical Strategy: Following Move Higher With Support At Prior Triangle ($51-$49/bbl)
- Supply Balance OPEC Seem To Align With Higher Prices Should Demand Rise
- Oil Price Closing in on Fourth Straight Weekly Gain, Gold Price Stable at $1,250/oz.
A favorite premise in technical trading of mine is that consolidation favors trend continuation. That truism played out in Crude Oil as we traded at 15-month highs on the back of a very large inventory draw per the EIA U.S. Inventory Data that showed U.S. Crude Inventories fell by 5.25mn bbl last week against expectations of a build of +2.1m bb. The equally active December contract (given that November closes on Thursday) is trading above $52/bbl. Cushing, OK Inventories also fell below 60m bbl for the first time this year on today’s report.
Interested In a Quick Guide about OPEC, Click Here
We have recently discussed the two-way positives for the Oil market of a near capitulation of bearish positions as per the CFTC Commitment of Trader’s Report and the 15-month low volatility readings we see in crude. Both factors have allowed little to stand in the way of Wednesday’s breakout.
In addition to the net-long positioning shift and low-volatility, we also see a weaker dollar emerge. While a weaker USD is expected to be temporary, and the relative valuations could keep USD supported it is still a boon for commodities in the short-run.
H4 Crude Oil Price Chart: Breakout Triangle Consolidation Keeps Bulls Happy
We have long been a proponent of a Bullish or Reverse head and shoulder pattern in Crude Oil that we discussed in our Q4 Oil Forecast. Wednesday’s price action brings us closer to that outcome. The Bullish pattern could take the once-battered commodity as high as $78/bbl.
The chart above shows the move above triangle resistance (upper white line) alongside above the June 9 high of $51.64/bbl. The Ichimoku Cloud on a 4-Hour chart can continue to act as a support in the move higher. A close examination will show you that the cloud is turning bullish once again whereas the mid-point is of the 9 26 trading-periods extended out 26-periods is moving above the 52-period mid-point. While Ichimoku has many components, the cloud turning is one of the leading indicators that the path of least resistance is now higher.
We’ll continue to favor a bullish continuation unless we get a break below the October 10th low ($49.35/bbl), which would turn us short-term neutral with the probability favoring a larger breakdown toward the 50-DMA near $46.50 before aligning with the longer-term bullish bias.
Key Levels Over the Next 48-hrs of Trading As of Wednesday, October 19, 2016
T.Y.
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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.
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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
- Very relaxed at USD 75/b. Risk barometer will likely fluctuate to higher levels with Brent into the 80ies or higher coming 2-3 weeks
- Brent needs to fall to USD 58/b to make cheating unprofitable for Kazakhstan
- All eyes on OPEC V8 and their July quota decision on Saturday
- Brent steady at $65 ahead of OPEC+ and Iran outcomes
- A shift to surplus will likely drive Brent towards the 60-line and the high 50ies
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