In October, the quotes of WTI crude oil corrected significantly, the price fell by more than USD 10 per barrel.
The main catalyst of the fall was the change in trading tendencies. At the end of September, the price reached a new local maximum and key resistance level of 76.70, after which the demand for “black gold” significantly decreased due to fixing a large volume of long positions and increasing the volume of short ones. One should note that the price did not move out of a wide mid-term uptrend. Yesterday, the instrument reached the lower limit of the range and, failing to break it down, consolidated above it.
Given that the number of active drilling rigs in the US is growing, today investors will focus on data on changes in oil reserves from the US Department of Energy.
Support and resistance
The price has not moved out of the ascending range, which means that the probability of maintaining a long-term upward momentum is high. Quite possibly, the instrument will regain positions from the current level already due to the growth in demand and positive fundamental factors. Oil was also pressured by USD strengthening during the last few weeks. If the key support level of 65.75 is taken and the strengthening of the dollar continues, the alternative scenario would be a fall to new lows.
Technical indicators on W1 chart and above still give a signal for further growth: MACD keeps a high volume of long positions, and Bollinger Bands are directed upwards.
Support levels: 66.50, 65.75, 64.10, 63.35, 63.00.
Resistance levels: 68.00, 68.75, 70.70, 71.50, 74.00, 75.00, 76.00, 76.70.
Long positions may be opened from the current level with the target at 75.00 and a short stop loss at 64.00.
WTI Crude Oil
|Support levels||63.00, 63.35, 64.10, 65.75, 66.50, 68.00, 68.75, 70.70, 71.50, 74.00, 75.00, 76.00, 76.70|
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