As we have mentioned in our previous Crude Oil forecast, the market is under the control of the Bulls.
What were the Bullish fundamentals:
- OPEC + solid cuts – Latest Announcement from Russia: “We won’t fight with US oil producers”. That means: They will not let the prices go down to stop US drilling activities.
- Venezuela Turmoil
- Optimism in US-China Trade Talks.
- Now we have a new bullish factor: Weakening USD. Simply saying: Historically, weak dollar sends the oil prices higher. Below is the DXY vs WTI correlation chart.
Another bullish factor could be GDP. If there is a positive boost to GDP growth projections from the 35-day long US government shutdown ending, the commodity could benefit from the economy getting back on track faster than expected.
On the Bearish Side:
Although, it is worth pointing out that if the US-China trade war talks do not make any headway, sentiment could quickly sour and cause fears over slowing economic growth to resurface. This would likely send crude oil lower. Also, another pivot in monetary policy by the Fed back to a hawkish tone poses an additional downside risk to Crude Oil prices.
The previous day’s EIA report that showed a major buildup in crude oil inventories for the week at 8 million barrels, bringing the total to 9% above seasonal limits.
EIA and IEA’s estimate is 55 $-60 $ for 2019. And the difference between Brent and Crude is 5$.
Crude is trading in a ascending trend channel on the H4 Chart. It is above EMA 50 and Ichimoku Cloud.
On the Daily Chart, Crude ended week above EMA 50 and inside the cloud which is a clear bullish reversal signal.
53.91 remains the key resistance on the H4 chart. A clear break will carry the price towards 54.69 55.47 and 56.25. The key is 56.25 $ as the historical and psychological level.
On the downside, 51.56 is the first key support. If the prices makes H4 closings below 51.56, we could see the price testing 50.00 MA 200 & MM 0/8 support.
In our midterm strategy, we plan to use the possible pullbacks as buying opportunities.
Our pullbacks levels to buy: 52.34 and 51.56 stop loss below 50.00 targeting 54.69 55.47 and 56.25.
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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money
Crude Oil: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility