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Crude Oil Trades in a Narrow Price Range

wti crude oil

Looking at the West Texas Intermediate (WTI) crude oil futures contract on the above daily MT 4 chart, saw its fall lower capped by the short term 21 day simple moving average (SMA) and gains are being capped by the fifty (50) day simple moving average.

There is a surge of coronavirus (Covid-19) through the European Union, the United Kingdom, the United States and other areas which is hurting sentiment as traders feel that the demand for crude oil will wane if economies slow down or new lockdown measures are initiated. This has hurt the price of the WTI crude oil contract.

Today’s economic calendar is all about the Flash/Markit purchasing managers’ indices (PMI). The European Union will see the Eurozone flash manufacturing purchasing managers’ indices (PMI) as well as the euro area’s largest economy, Germany and their second largest economy, France.

The United States will release monthly flash services and manufacturing purchasing managers’ indices (PMI). The United Kingdom is publishing monthly retail sales data as well as their monthly Gfk consumer confidence index.

Daily WTI Crude Oil Technical Analysis                       

Looking at price action the WTI futures contract is having trouble or trying hard to stay above the key $40 per barrel level. Price action has been trading between $40.96 per barrel and $39.78 per barrel.

Right now price action lacks clear price direction as this contract is trading in a rather narrow pattern. With that said there are some strong upside barriers with a bearish relative strength index (RSI). On the upside prices were rejected at the one hundred day simple moving average at $40.45 per barrel.

The next upside barrier comes into play at the fifty day simple move average at $40.68 per barrel. A daily close above the 50 day SMA should see the bulls coming back into the market.

On the downside, the first key downside barrier to monitor lines up at the 200 day simple moving average at $38.20 per barrel. The 200 day SMA is also downwards sloping indicating a bearish signal.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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