Crude Oil Prices Target Resistance Ahead of OPEC
- Crude Oil prices rally vulnerable as prices approach near-term resistance ahead of OPEC
- Updated targets & invalidation levels
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Technical Outlook:Crude prices are approaching a key resistance range we’ve been tracking at 51.40/64- this region is defined by the June 2016 swing high and the October high-day close and converges on the upper median-line of the descending pitchfork extending off the yearly high.
The focus is on this resistance range with the immediate topside bias vulnerable near-term while below this threshold. Interim support rests at 50.70 with broader bullish invalidation set to the monthly opening-range highs at 49.17 (note the 200-day moving average also rests here). A breach higher targets initial objectives at basic trendline resistance extending off the yearly highs (currently around 52.60s) and the April highs.
Notes: A closer look at price action further highlights this near-term resistance zone with the weekly opening range taking shape just below- look for the break for further validation of our near-term directional bias. Interim support rests at 50.70 with a near-term bullish invalidation set to 49.60/86.
A topside breach of this region targets the April high at 53.74 backed by the 76.4% retracement at 54.29. Keep in mind that the OPEC meeting is slated for Thursday and is likely to fuel added volatility in crude prices.
- A summary of IG Client Sentiment shows traders are net-long crude- the ratio stands at +1.2 (54.6% of traders are long)- bearish reading
- Traders have remained net-long since April 19 when Crude traded near 53.12; price has moved 3.4% lower since then
- Long positions are 8.1% lower than yesterday and 34.0% lower from last week
- Short positions are 7.2% higher than yesterday and 37.1% higher from last week
- Although sentiment continues to point lower, the recent dramatic pullback from extremes in long positioning does warn of a possible shift in retail here and gives a further mixed near-term signal on crude prices. From a trading standpoint, we’ll be looking for either a dip into structural support near 49.60/86 or a topside breach through 51.64.
See how shifts in Crude Oil retail positioning are effecting market trend- Click here to learn more about IG Client Sentiment indicators!
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- Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.