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Crude Oil Prices Rally on Potential OPEC Cut

Crude Oil Prices Rally on Potential OPEC Cut

Walker England, Forex Trading Instructor

Talking Points:

  • Crude Oil Prices Surge on Potential OPEC Production Cut
  • Daily Breakouts May Influence Longer Term Trends
  • Crude Oil MVA Support is Found at $43.95

The bearish move in Crude Oil prices this week has been short lived, with the commodity now trading back to weekly highs at $45.29. This move has been predicated on the hope that OPEC will agree to cut production later in the week. This morning’s advance should be seen as significant as it is the first sign of a meaningful reversal after Crude Oil Prices have declined as much as $9.73 a barrel from the October high of $51.91.

Technically, Crude Oil prices are now trading back above the 200 day MVA (simple moving average). Typically this indicator is used as a trend qualifier, and if Crude remains above the MVA it may be seen as a bullish signal for the market. It should be noted that the last time that Crude Oil prices traded above the MVA was in August, which saw the commodity advance as much as $12.68 a barrel. Even though that prices are now trending higher, traders should continue to monitor the MVA at $43.95. A move in Crude Oil prices back under the MVA could just as easily signal shift towards bearish market conditions.

Crude Oil Price, Daily with 200 MVA

(Created Using TradingView Charts)

In the short term, Crude Oil prices continue to trade through key values of resistance. This includes today’s R4 Camarilla pivot, found at a price of $44.55. While prices have well exceeded this point, traders may consider holding an intraday bullish outlook for Crude Oil above this value. In the event that prices turn in the short term, traders may begin looking for a bearish reversal below the R3 pivot at $44.11. A move under this pivot would suggest an end to the current bullish movement, and suggest that prices may press lower towards the previously support value of the daily MVA at $43.95.

Crude Oil Price, 30 Minute with Pivots

(Created Using TradingView Charts)

--- Written by Walker, Analyst for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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