Forex Marketz Daily Forex News – Fully Markets Update
Points to consider with Crude oil:
- Crude oil rebounds after testing range support.
- There is a lack of Brexit news which is keeping oil from making any big moves at this time.
The commodity universe and US WTI crude have settled into an uneasy consolidation pattern thanks to the lack of Brexit inspired volatility. Crude has seen two days of recovery along with stock prices. There is an improvement in sentiment and risk appetite thanks to the lack of anything new on the Brexit news front. We have heard very little on the post referendum UK narrative. This has allowed the crude oil market to shift into a digestion mode. This is not an unexpected outcome at this time. There was also some unexpected fundamental news as the weekly inventory drawdown was larger than expected coming in a -4.05 billion barrels versus the -2.5 billion barrels. This provided support for the WTI contract.
Crude Oil Technical Analysis
Let’s talk about today’s WTI crude oil technical analysis. As mentioned above, price action is consolidating below $52 per barrel. A daily close below the near term support at 45.60 challenges the next downside barrier that lines up at 41.85. The alternative oil analysis, notes the first layer of resistance lining up at the falling trend line. This is also a former support level and lines up at 49.72. A break above this first technical resistance level challenges the next upside barrier at 51.85.
Trade Strategy
From a risk to reward perspective, there is no long or short oil trade at this time. Price action is too close to a technical resistance level to warrant a long oil trade. There are no bearish reversal cues to warrant a short sale at this time. For now, I will opt to stand aside and remain flat in this commodity market.
