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Crude Oil continues to Fall Lower

crude oil wti

Looking at the headline U.S. West Texas Intermediate (WTI) crude oil futures contract and above four (4) hour MT 4 chart, the WTI contract continues to fall from $41.59 per barrel during the early Asian trade session today.

The crude oil benchmark rose to a multi-year high price point yesterday before consolidating then falling lower after weekly American Petroleum Institute (API) private inventory levels out of the United States also released yesterday.

The private API inventory data showed that U.S. stockpiles, for the week ending 17 July, grew by 7.544 million barrels. This was below the previous week contraction of 8.322 million barrels.

On the economic calendar, the United States is publishing weekly crude oil inventory levels. Also, the world’s largest economy will release monthly existing home sales data as well as monthly housing price index (HPI) data. Canada, an oil exporting nation, will release their monthly core and headline consumer price index (CPI).

The rest of the economic calendar is quite quiet again today. Japan is releasing their monthly flash manufacturing purchasing managers’ index (PMI). The United Kingdom and the European Union has no economic data scheduled to be released.

Yesterday, the European Union Commission passed an historic fiscal stimulus deal bringing the single currency and trade bloc closer to integration. This news supporting sentiment linked currencies and asset classes like equities, the British pound and the euro (EUR).

Daily WTI Crude Oil Technical Analysis                                       

Looking at the above crude oil price chart, the relative strength index (RSI) was indicating overbought and the 14 day MACD histogram is now signaling a bullish signal. While above the congestion zone in play at 41.45 to 41.35, prices could challenge the upside barrier in play at $42 per barrel.

The next layer of technical resistance lines up at $42.50 per barrel with an upward sloping trend line in play since 7 June coming into focus at $43.50 per barrel. The February monthly high price point lining up at $44 per barrel would then come into play.

On the flip side a daily close below $41 per barrel will open the door to challenge 441 per barrel. The round number at $40 per barrel would the come into focus.                                

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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