Analys från DailyFX
WTI Crude Oil Price Rebounds as FOMC Keeps Rates Flat
Talking Points
- Crude Oil Prices Rebound After FOMC Keeps Rates Flat
- Key Support for Crude Oil Falls Near $41.75
- If you are looking for more trading ideas for Oilcheck out our Trading Guides
The price of WTI Crude Oil (CFD:USOil) has temporarily found support after this afternoons FOMC rate decision and statement. The event found the FOMC keeping rates unchanged at 0.50%; and key statements read that for the month of June “Market-based measures of inflation compensation remained low.” As such, Crude prices and other commodities such as gold have rebounded from lows put in place during the event. If prices remains supported, it opens Crude Oil up to trade back towards session highs at $43.17. Alternatively, if support falls it would suggest a continuation of the commodities daily decline.
Crude Oil Prices, 4Hour Chart
(Created using Marketscope 2.0)
In the 5-minute graph below, we can see the price of Crude Oil moving off of session lows at $41.66. The Grid Sight Index has indicated that short-term momentum is currently pointing higher through the creation of a series of higher lows. After reviewing 4,451,998 pricing points, GSI has advanced a minimum of $0.14 in 64% of the 379 matching historical events. The first historical distribution line falls at a price of $42.19. A move through this price would suggest the beginning of a bullish daily reversal for Crude Oil. In this scenario, traders should watch for prices to test the last bullish historical distribution at $42.55. From here, traders may begin to target the previously mentioned daily high of $43.17.
It should be noted that the first bearish historical distribution currently resides at $41.37. The Grid Sight Index found that prices declined $.068 or more in just 8% of the matching 379 historical events. A move through this value would suggest a resumption of bearish momentum for Crude Oil on the creation of new daily lows.
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WTI Crude Oil Price 5 Minute GSI Chart
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It should be noted that Sentiment for Crude Oil (Ticker: USOIL) has moved to a positive extreme from our last reported SSI reading of +1.43. Currently 69% of positioning long, with SSI reading at +2.28. Typically, an extreme positive reading is indicative of future declines in price. If Crude Oil prices breakout to new lows, SSI would be expected to remain at positive extremes. Alternatively, if prices were to rebound, traders should look for SSI figures to move back towards values that are more neutral.
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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.
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
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