Crude Oil, Weekly
San Francisco Fed president Williams: said over the weekend that there is a “strong case” for a December rate hike. This sparked a dollar rally and some commodity volatility this morning. Today the Washington Post said that Saudi Arabia’s government is willing to cooperate with other producers to maintain stable prices. Therefore it’s not surprising that Nymex crude has had a mixed trading day today. Crude oil had a gap opening higher (we’ve been talking about Crude being at support!) in start of the futures trading. Then oil slid lower before bouncing higher again. Commodity currencies underperformed, with USDCAD whipsawing up and down with the oil market.
In the weekly picture crude oil has been forming a vast bullish wedge formation. This price action is taking place near multi-year low that took place in 2009. Current price action is taking place at lower Bollinger Bands and near a 37.75 support from August this year. Stochastics are oversold and the last week’s bar was a narrow range candle with open and closing prices near each other. Such candles signal that supply and demand are in a relative balance. Nearest resistance level is at 42.58 while the nearest support level is at 37.75.
Crude Oil, Daily
In the latest Live Analysis Webinar we focused on the fact that Crude oil was trading at a pivotal support (37.75 – 40.50) while the USDCAD has been trading near this year’s highs. This combination suggests that both markets are near potential turning points. Today’s opening gap to the upside together with OPEC’s comments supports the view while the bullish pin bar (a hammer) from Friday suggests the same. Stochastics, RSI and Money Flow Index are edging up from oversold levels. Today’s price advance was turned as the pivotal resistance at 42.58 invited sellers to push the price down yet again. Support area: is a pivotal candle support at 37.75 – 40.51 while resistance levels are at 42.58, 45.90 and 48.32.
Crude Oil, 240 min
The 42.65 proved to be too much for the oil bulls to handle and today’s rally was quickly rejected. The last 4h candle from Friday is bullish but today’s failure to challenge the resistance takes some of its edge away. Price is not trending lower anymore in this timeframe and there is some attempt to change direction from the support.
Conclusion
In the latest Live Analysis Webinar we identified the 37.75 to 40.50 area as potential support and 42.60 as a resistance. These S&R areas have proven to be highly valuable as Crude Oil has been bouncing between the levels. This is a good example of how fundamental information impacts the market and the technical levels as still very valid and valuable. The increased volatility with an opening gap suggest that market participants put two and two together and are looking for a turnaround in oil. However, the sideways move in the weekly chart is fairly near and could cause sideways action between it and the below support range. Saudi comments suggest oil market is near levels where the turnaround can actually take place.
Janne Muta
Chief Market Analyst
If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:
http://www.topforexbrokerscomparison.com
About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
“My mission is to help you to become a confident and successful trader”
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.