Analys från DailyFX
Crude Oil Price Forecast: Technical Picture Favors The Patient Bulls
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Talking Points:
- Crude Oil Technical Strategy: Price triangulation above support (50/52) favors eventual upside
- Crude Oil – Triangle Possibility from January 3rd
- Resistance/ Bullish validation set at corrective double top at $54.29/31 per barrel, evening star top
Crude Oil has been absent of any decent volatility, but that doesn’t stop the fact that the background picture developing could still be favoring a strong rise before the end of Q1 2017. We have had two back-to-back weeks of massive US Inventory builds out of Cushing OK, but the price of Crude Oil remains above our key support zone highlighted as a yellow rectangle on the chart below in the $50/52 price range.
The background behind what is happening in Crude is much more encouraging than what you see currently on the Crude Chart. The price of other industrial commodities like Copper and Iron Ore has led the view of the Reflation Trade, which shows that growth and possibly inflations expectations are on the rise, which could boost Oil.
The price of Copper recently broke above the early November high, when many Commodities, namely Gold turned tail and eventually dropped in H2 2016 by nearly 16%. The move higher in other commodities alongside the price stability in Crude Oil could be indicative that there is amarket belief that the cuts that OPEC is currently adhering to are doing long term good to the stability of the Oil market. While we do not forecast a $100/bl of oil, the technical picture and Intermarketanalysis do seem to show that a move to the lower $60/bbl range is believed to be very feasible.
We still need to see a breakout above the current triangulation pattern or sideways consolidation that has been taking place since we rang in the New Year. The price level that we continue to watch is a corrective lower high, and likely a Triangle ‘B’ wave near $54.30. A break above this level would show that a strong price move could be underway as we’ve seen in other commodities and could be even more pronounced if the recent break higher in the USD on Janet Yellen comments fails to holdrecent support.
A break below the $50/52 zone would cause me to reconsider the Bullish view. However, consolidation continues to favor eventual continuation of a trend, which has been higher since the handle of the Pitchfork in August 2016.
When a market fails to drop in light of seemingly Bearish news like massive US inventories, it could be the fuel is spilled and the bullish move is just waiting for the right spark, which could cause the price to move higher with volatility not yet seen in 2017. That would be a common play out of a triangle pattern, which tends to drain the enthusiasm of the prior move by consuming time in the consolidation pattern before eventually advancing the trend.
Bottom line, while the price is wallowing in the low-volatility environment, keep alerts on a daily close above $54.30 or below $50/ bbl. Either break could be indicative of the next big move in Oil with a decent bit of long-waiting volatility to add.
D1 Crude Oil Price Chart: Crude Oil Volatility Is Subdued, Price Bounce From Support Favors Upside
Chart Created by Tyler Yell, CMT Courtesy of TradingView
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Key Levels Over the Next 48-hrs of Trading as of Wednesday, February 15, 2017
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
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
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