Analys från DailyFX
WTI Crude Oil Price Forecast: Oil Firm on News of Iranian Support
To receive Tyler’s analysis directly via email, please SIGN UP HERE
Talking Points:
- Crude Oil Technical Strategy: Formidable Resistance As Bull Market Is Entrenched
- Dollar Direction and Oil Demand Continue To Be Key Themes In Oil Rally
- Sentimental Trading System Buy Signal Remains, But Is Cooling Down
Access Our Free Q3 Oil Outlook As Oil’s Best Quarter Looks For Confirmation
Tuesday saw the price of WTI Crude Oil turnaround toward August highs on positive news for the industry. Iran is said to be sending positive signals that they may support a joint action by OPEC by limiting production so that demand and supply can even out. In addition to the positive fundamental news, all eyes are on Janet Yellen’s Friday speech that may help investors understand what lays ahead for the US Dollar into year-end. The US Dollar is inversely correlated to the price of US Oil so that a weakening US Dollar would likely benefit the price of WTI Crude Oil even further.
Track short-term Crude Oil price levels and patterns with the GSI indicator!
If the US Dollar weakness continues, it seems like this trend could just be getting started. For more definitive levels, let’s go to the charts.
Crude Oil Price Chart Rises Toward Well Identified Resistance at $49.25/bbl
The chart above has consistently provided a helpful framing price action in WTI Crude Oil. After failing at the top channel in June, the price quickly dropped down to a pre-identified zone provided by the median line and the Fibonacci Retracement levels in focus between $41.85-$35.22/bbl. Given the move in August, which last week registered a Bull Market, the price support that is in focus now is ~$41.27/bbl.
As you can see, the price has moved right back up to formidable resistance that is provided by the Channel Top and the price is now resting at the top of the Ichimoku Cloud. A break above this Andrew’s Pitchfork resistance (Red) could provide real excitement as it would be the first time since summer of 2014 that we’ve seen what looks to be a sustainable bullish break for Crude Oil that could keep the price comfortably above the $50/bbl level for a while.
Before resistance breaks, given the ~17 Months within the price channel (aside from the January/February breakdown,) it’s safer to favor price remaining as opposed to breaking out given the low-volatility environment we find ourselves. However, that would likely need a breakdown in OPEC negotiations and a stronger US Dollar, which currently seem like a remote possibility.
The key support that would deflate the confidence of the 20%+ August trend would be a break below the higher-low of $41.27/bbl from August 11. A breakdown below there could be the first confident sign that price will continue to wallow lower in the falling channel drawn on the chart.
Bottom Line:
The price of US Oil does not seem to be slowing down as it heads toward trend-defining resistance near $49/bbl. Positive signs out of OPEC that may cap production as US production continues to lag may help support prices at higher levels. The potential for potential further US Dollar weakness would likely compound the effects of Iran potentially supporting OPEC action to help the price of Oil surmount and remain above $50/bbl.
Contrarian System Beginning To Favor Upside Risk as of 8/23/16
In addition to the technical focus, we should keep an eye on retail sentiment. The upside is beginning to align with our Speculative Sentiment Index or SSI for now.
As of mid-day Tuesday, the ratio of long to short positions in the USOil stands at -3.26, as 23% of traders are long. Yesterday the ratio was -3.16; 24% of open positions were long. Long positions are 53.9% lower than yesterday and 70.8% below levels seen last week. Short positions are 52.5% lower than yesterday and 26.2% below levels seen last week. Open interest is 52.8% lower than yesterday and 54.4% below its monthly average.
We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the USOil may continue higher. The trading crowd has grown further net-short from yesterday and last week. The combination of current sentiment and recent changes gives a further bullish trading bias.
Key Levels Over the Next 48-hrs of Trading As of Tuesday, August 23, 2016
T.Y.
Think Oil has more room to run? Trade Oil With Low Margin Requirements (non-US Residents only)
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
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
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
- Bombs to ”ceasefire” in hours – Brent below $70
- A muted price reaction. Market looks relaxed, but it is still on edge waiting for what Iran will do
- 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
-
Analys från DailyFX10 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter2 år agoUpptäck de bästa verktygen för att analysera Bitcoin!
-
Marknadsnyheter5 år ago
BrainCool AB (publ): erhåller bidrag (grant) om 0,9 MSEK från Vinnova för bolagets projekt inom behandling av covid-19 patienter med hög feber
-
Analys från DailyFX12 år ago
Japanese Yen Breakout or Fakeout? ZAR/JPY May Provide the Answer
-
Marknadsnyheter2 år agoDärför föredrar svenska spelare att spela via mobiltelefonen
-
Analys från DailyFX12 år ago
Price & Time: Key Levels to Watch in the Aftermath of NFP
-
Analys från DailyFX8 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter7 år agoTeknisk analys med Martin Hallström och Nils Brobacke