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. See our updated Privacy Policy here.

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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
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
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Although the Fed hawkish bias has caused some reflationary position unwinding and anxiety about the outlook for commodities, the fundamental picture for oil has not changed and remains bullish. Get your market update from @DColmanFX here: https://t.co/N5X16b8ljP https://t.co/UA6CfjTLfc
  • A short-term ascending channel is under threat after Bitcoin’s first attempt to break through a stubborn resistance zone failed. Get your market update from @nickcawley1 here: https://t.co/RbnADE05iu https://t.co/HcrqaKg5F3
  • Is the Eurozone entering into a second debt crisis? Find out here: https://t.co/27Y8gKO0xY https://t.co/qHyg1KpVKH
  • And the Monday Asia trading session has officially begun. A pair to have on your watch list to kick off early trade: $AUDUSD post head-and-shoulders' neckline (and 200-DMA) breakdown https://t.co/iuYqEN5xpv
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/DIP9cgoSUt
  • Here are the top scheduled event risks on my calendar for the coming week. Global PMIs, a few rate decisions, the Fed's bank stress test results, the Fed's favorite inflation indicator and a run of Fed speak among much more: https://t.co/3jIl4PvHiA
  • I know it is a cognitive bias, but it seems that every time I take a day off, there are significant market moves. Dow's tumbled into a 5th straight session Friday with 10-day correlation to Nasdaq most extreme negative in 4 years https://t.co/V3U6IOAEXz
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST (12:30GMT) on DailyFX!! - lots to discuss on the back of last week's #Fed Fireworks! https://t.co/lxd5fZnn4H
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/l0j9vLrMIp
  • Markets Week Ahead: Gold, Dow, Pound-Dollar, BoE Rate Decision, Fed Risk, PMIs Check out my recap of last week and preview of upcoming event risk, plus all the latest forecasts from the @DailyFX team below. Link to Analysis - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/06/20/Markets-Week-Ahead-Gold-Dow-Pound-Dollar-BoE-Rate-Decision-Fed-Risk-PMIs.html $GLD $DJI $GBPUSD #Trading
Oil Price Outlook Mired by Bearish RSI Formation, Shift in Sentiment

Oil Price Outlook Mired by Bearish RSI Formation, Shift in Sentiment

David Song, Strategist

Oil Talking Points

The recent rebound in crude quickly fizzles, with oil slipping back below the 200-Day Simple Moving Average (SMA), and energy prices may continue to pare the advance from earlier this year as the bearish momentum appears to be gathering pace.

Image of daily change for major financial markets

Oil Price Outlook Mired by Bearish RSI Formation, Shift in Sentiment

Image of daily change for oil pricesImage of DailyFX economic calendar

Fresh figures coming out of the U.S. Department of Energy (DoE) appeared to be ignored as oil climbed to a session high of $67.69, but the Organization of the Petroleum Exporting Countries (OPEC) and its allies now appear to be pushing for lower energy prices as the ongoing pickup in crude inventories warn of slowing demand.

Image of eia crude consumption

With the latest Monthly Oil Market Report (MOMR) forecasting slower consumption in 2019, the trade war between the U.S. and China, the two largest consumer of oil, may push OPEC and its allies to tame crude prices amid the weakening outlook for global growth. In turn, OPEC may continue to shift gears ahead of the next meeting on December 6 especially as the U.S. sanctions on Iran go into effect in November, and the recent surge in market volatility may fuel a further shift in retail sentiment, with the development warning of a larger decline in energy prices.

Image of IG Client sentiment for oil

The IG Client Sentiment Report shows an ongoing change in retail interest as 78.1% of traders are now net-long crude, with the ratio of traders long to short at 3.56 to 1. In fact, traders have been net-long since October 11 when oil traded near the $71.00 mark even though price has moved5.8% lower since then.The number of traders net-long is 7.2% higher than yesterday and 39.6% higher from last week, while the number of traders net-short is 13.4% lower than yesterday and 31.9% lower from last week.

The persist buildup in net-long interest suggests traders are still attempting to fade the weakness in oil, while the net-short community takes profit, and a further shift in crowd sentiment may continue to provide a contrarian view especially as oil threaten the upward trend from earlier this year. At the same time, the Relative Strength Index (RSI) highlights a similar dynamic as the oscillator continues to track the downward trend from earlier this month, with a break below 30 raising the risk for a larger decline in crude oil prices as the bearish momentum gathers pace. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

Oil Daily Chart

Image of daily chart of oil prices
  • Crude remain vulnerable as it trades back below the 200-Day SMA ($67.45), with the close below the $67.00 (50% expansion) to $67.50 (50% retracement) region bringing the $64.80 (100% expansion) to $65.30 (61.8% retracement) hurdle on the radar, which largely lines up with the August-low ($64.45).
  • Break/close below the $64.80 (100% expansion) to $65.30 (61.8% retracement) raises the risk for a move towards the June-low ($63.62), with the net region of interest coming in around $62.10 (78.6% retracement) to $62.80 (38.2% retracement).

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