Analys från DailyFX
Crude Oil Prices Remain Quiet Ahead of Inventory Data
Talking Points:
- Crude Oil Prices Remain Quiet Ahead of Inventor Data
- Technically Crude Oil Prices Remain in an Inside Bar Pattern
- IG Client Sentiment Remains Positive at +2.66; 72.7% Net-Long
Crude oil prices are consolidating for Tuesday by failing to breakout to a significant new high or low intraday. This consolidation has come despite prices originally trading lower on fears that OPEC output cuts may again be put into question. Now traders are looking towards Wednesday’s U.S Crude Oil Inventories data to provide the market further direction. Expectations for tomorrow’s report by the U.S Energy Information Administration (EIA) are expected to reveal that U.S. commercial crude inventories have been decreased by a total of 3.50 million barrels. As the market is still reflecting an oil glut, crude oil prices may potentially become volatile during this data release.
Crude oil prices are technically consolidating in an inside bar pattern. Despite today’s late day rally, the commodity has failed to breakout above yesterday’s high or low. For reference, Monday’s daily high is found at $48.50 and may now be considered as a value of resistance. Alternatively, Mondays low at $46.97 may be considered as a value of support. Traders should continue to monitor these values going into tomorrow’s news event. In the event of a bullish breakout, traders may begin to target a move back towards $50.00 a barrel. A bearish breakout however, may allow traders to target the standing 2017 yearly low at $43.97.
What’s next for crude oil and commodities markets? Read our price forecast here.
Crude Oil Price Daily Chart Inside Bar
Why and how do we use IG Client Sentiment in trading? See our guide.
Traders tracking sentiment should note that IG Client Sentiment currently remains net-long. With a reading of +2.66, this suggests that 72.7% of traders are currently long the market. Typically sentiment is considered a contrarian market indicator, which suggests that crude oil prices may continue to trade lower. In the event of a bearish breakout below $46.97, it would be expected to see sentiment totals remain at their negative extremes. If the market breaks higher however, traders may look for sentiment values to neutralize from their current net-long extremes.
— Written by Walker, Analyst 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
You can receive Paul’s analysis directly via email bysigning up here.
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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