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.
Check out our Crude Oil 2Q projections in our Free DailyFX Trading Forecasts.
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.