News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Heads Up:🇬🇧 BoE Vlieghe Speech due at 09:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-20
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT for insight on London #FX and #CFD trading. Register here: https://t.co/AoM3UvLtcF https://t.co/KCHeNfayki
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/q8nG7unK17
  • Just posted: a fascinating chat with my @DailyFX colleague @HathornSabin on #gold, $USD, $MXN and more https://t.co/vKdwKJZuEF
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.83%, while traders in EUR/USD are at opposite extremes with 67.62%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/sf61r9rewm
  • Gold Prices May Fall Further as US Fiscal Stimulus Hopes Fizzle - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/10/20/Gold-Prices-May-Fall-Further-as-US-Fiscal-Stimulus-Hopes-Fizzle.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #XAUUSD #gold #FiscalPolicy #stimulus https://t.co/fS6r9kPXPY
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/5DC2kgetXj
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Silver: -0.15% Gold: -0.20% Oil - US Crude: -0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/yDIGCBjieN
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: -0.04% 🇪🇺EUR: -0.05% 🇨🇦CAD: -0.08% 🇬🇧GBP: -0.18% 🇦🇺AUD: -0.47% 🇳🇿NZD: -0.61% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/JIAsnaWcPz
  • US Dollar Index Trades in Price Channel Ahead of US Stimulus Deadline - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2020/10/20/US-Dollar-Index-Trades-in-Price-Channel-Ahead-of-US-Stimulus-Deadline.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $USD $DXY https://t.co/FAi3oLk9Xu
Oil Price Weakness to Persist as Bullish Formations Snap

Oil Price Weakness to Persist as Bullish Formations Snap

2018-10-11 21:20:00
David Song, Strategist
Share:

Oil Talking Points

Crude extends the decline from earlier this week as fresh updates from the U.S. Department of Energy (DoE) show a further buildup in oil inventories, and recent developments keep the downside targets on the radar as both price and the Relative Strength Index (RSI) snap the bullish formations from August.

Image of daily change for major financial markets

Oil Price Weakness to Persist as Bullish Formations Snap

Image of daily change for crude oil pricesImage of EIA US field production of crude oil

The ongoing pickup in energy inventories is likely to keep oil prices under pressure as the report also shows U.S. field production of crude climbing to 11,200 b/d in the week ending October 5, and the current environment may foster a larger correction in oil especially as the Organization of the Petroleum Exporting Countries (OPEC)see less demand in 2019.

OPEC’s Monthly Oil Market Report (MOMR) now calls for slower consumption in the year ahead, with the organization forecasting world oil demand growth at ‘1.36 mb/d, down by around 50 tb/d from last month’s projections, mainly reflecting adjustments in the economic projections for Turkey, Brazil and Argentina.’

Keep in mind, OPEC and its allies have shown little to no interest in boosting production as the U.S. sanctions on Iran are set to kick in next month, and it seems as though the group will stick to the current quota ahead of the next meeting on December 6 even as the International Monetary Fund (IMF) cuts its world growth forecast for the first time since 2016.

Image of IG client sentiment for crude oil

Nevertheless, the IG Client Sentiment Report also warns of a larger pullback in oil prices as the recent selloff has been accompanied by a shift retail interest. The gauge now shows 54.8% of traders are net-long crude, with the ratio of traders long to short at 1.21 to 1. The number of traders net-long is 4.3% higher than yesterday and 12.4% higher from last week, while the number of traders net-short is 27.3% lower than yesterday and 42.9% lower from last week.

The sharp jump in net-long interest suggests traders are attempting to fade the weakness in oil, and a further shift in crowd sentiment may offer a contrarian view especially as both price and the Relative Strength Index (RSI) snap the bullish formations from earlier this year. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

Oil Daily Chart

Image of crude oil daily chart
  • Despite the close above the $75.20 (78.6% expansion) to $75.80 (100% expansion) hurdle, the broader outlook for oil no longer remains constructive as crude breaks channel support, with the RSI highlighting a similar dynamic.
  • In turn, downside targets are now on the radar, with a closing price below the $70.70 (50% retracement) to $71.00 (50% expansion) raising the risk for a move back towards the $69.10 (61.8% expansion) to $69.30 (61.8% retracement).
  • Next downside region of interest comes in around $67.00 (50% expansion) to $67.20 (78.6% retracement) followed by the Fibonacci overlap around $64.80 (100% expansion) to $64.90 (38.2% expansion), which largely lines up with the August-low ($64.45).

For more in-depth analysis, check out the Q4 Forecast for Oil

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES