Analys från DailyFX
Crude Oil Price Forecast: WTI Within 1XATR Of 2017 Highs On OPEC News
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Talking Points:
- Crude Oil Technical Strategy: Price triangulation above support (50/52) favors eventual upside
- Low Volatility At New And Higher Price Floor Favors Upside
- DailyFX Roundtable: Mixed USD, Rising Commodity Prices to Persist
- Developing Themes Technical Views in The Commodity Landscape
The last technical article painted a picture that the chart for Crude Oil appeared to favor the Patient Bulls. This view was taken from the background and larger momentum view as showed with price in relation to the Daily Ichimoku Cloud and Andrew’s Pitchfork drawn on the chart. Add to price sitting in a Bullish or upward bias with these two advanced indicators; the price has been triangulating since the beginning of the year.
Price consolidations that are visualized as a sideways move are very boring to watch, but their bias is rather clear. Consolidation tends to favor continuation of the prior trend. Since Mid-August, the price of Crude Oil has march confidently higher alongside many other commodities and commodity currencies. While Crude Oil has lagged many of its commodity brethren, there does appear to be a unified march higher in the commodity field that could continue if the anticipation of inflation persists.
On the fundamental front, we got word that OPEC is looking to step up its compliance with the late-November supply cut accord. Recent numbers we’ve seen were regarding compliance to the agreed-upon cuts were as high as 92%, but recent comments from OPEC were revealed to seek 100% compliance, which would further drop the international supply of Oil, which could continue to favor further upside.
Upon this comment from OPEC seeking higher compliance, we got a few institutions raising their Crude Oil Forecasts with Citi raising their forecast by $55/barrel. The combination of events seems to shift the focus back higher to new resistance near $55.25/bbl followed by $57.50/bbl.
Looking at the chart, we continue to see a new and higher floor in Oil at $50 per barrel, as we could be moving toward a possible supply deficit, which Goldman Sachs has predicted despite rising U.S Crude stockpiles.
The higher price floor has encouraged the view that we see an Elliott-Wave pattern known as a triangle, which is a mid-trend correction pattern. Naturally, this would mean that the price is taking a break from its prior advance higher in a bull market (lower in a bear market) before advancing again. Therefore, we continue to be on the look for validating signs that price is again marching higher.
Tuesday’s breakout on news of seeking increased OPEC Compliance, which OPEC Secretary-General Mohammad Barkindo recently said current compliance has been, “very encouraging,” alongside institutions pushing forecasts with the chart structure remaining bullish will keep our focus higher unless we see a close below the February low of $51.25/bbl.
D1 Crude Oil Price Chart: Crude Oil Has Broken Above Pre-Defined Evening Star Resistance at $54.29
Chart Created by Tyler Yell, CMT Courtesy of TradingView
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Key Levels Over the Next 48-hrs of Trading as of Tuesday, February 21, 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
- 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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