Crude Oil remains
rangebound with OPEC+ doing a pretty good job in maintaining prices stable
cutting production while demand is falling. The recent easing from China to
spur the economy is also adding to the resilience of Oil due to the
expectations that demand will soon pick up. Overall, there’s not much to do
here other than waiting for a breakout.
WTI Crude Oil Technical
Analysis – Daily Timeframe
On the daily chart, we can see that Crude Oil has
been basically rangebound since the beginning of May. We’ve been seeing this
kind of ranges since October last year where Crude Oil trades around a certain
price level and then falls to trade around a lower one. First it was around
$90, then $80 and now it looks like it wants to remain at $70. This is of
course a story of supply and demand where the global economy weakens taking the
price lower, but OPEC+ intervenes cutting production and avoiding a collapse in
prices.
WTI Crude Oil Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that since bouncing
from the $67 swing low level, Crude Oil has rebounded quite strongly and it’s
now targeting the resistance zone at
$73. The recent strength may be due to the easing measures being adopted in
China to counteract the weakening economy. We’ve already seen rate cuts from
the PBOC and if this is the start of an easing cycle, we might see Oil prices
breaking up soon.
WTI Crude Oil Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we
have a trendline where
the price has bounced off of recently. In fact, there was a strong support
level at $70 with the 50% Fibonacci
retracement level and a previous swing level giving
good confluence for
the buyers. The target now should be the resistance at $73 and a break above
that zone, should give the buyers enough conviction to target the $83 high. The
sellers, on the other hand, will either lean on the resistance zone to target
the $64 low or wait for the price to break below the trendline before piling in
and extend the selloff into the $64 level.
This article was written by FL Contributors at www.forexlive.com. Source