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Crude Oil Straddles the 100 Day EMA

crude oil

Looking at the West Texas Intermediate (WTI) crude oil contract on the above daily MT 4 price chart, the WTI contract is taking aim at $39.45 per barrel but finding support at the one hundred (100) day exponential moving average (EMA) during the early Asian trade session.

Yesterday, the WTI crude oil futures contract fell to a two month low price point as Saudi Arabia cut prices.

Today’s economic calendar is fairly light with not a lot impacting the price action with the WTI crude oil contract. The United States is returning from the Labor Day holiday weekend as their financial markets were closed on Monday.

The world’s largest economy is publishing monthly consumer credit. The Canadian economic calendar has no macroeconomic data on the schedule today.

The United Kingdom is publishing their private monthly BRC retail sales monitor.

The European Union will be releasing some economic data. The largest and second largest Eurozone economies, Germany and France will publish monthly trade balance data. Italy, the third largest economy in the Eurozone will publish monthly retail sales data.

Daily WTI Crude Oil Technical Analysis

Looking at price action, on the above daily MT 4 chart, the 14 day MACD histogram is starting to flash a bearish trend below the midline. Traders need to watch that 100 day EMA as price action is trading to either side here for the better part of a month.

The relative strength index (RSI) is also indicating oversold conditions as price action trades near its lowest level since 30 June.

A daily close above the 100 day EMA at $39.45 to $39.75 per barrel will open the door to challenge the key round number at $40 per barrel The next upside barrier comes into play at the 21 August low price point at $41.50 per barrel. The next layer of technical resistance then lines up at the 26 August high price point at $43.86 per barrel.

The first layer of technical support to monitor lines up at a congestion area in play at $39.10 to 38.70 per barrel. A daily close below this area opens the door to challenge the 25 June low price point at $37.15 per barrel.

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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