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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • RT @CNBCnow: BREAKING: SoftBank to take control of WeWork, spending $4B-$5B on new equity and existing shares in the We Company, sources te…
  • The Sterling extends its recent rally with spot $GBPUSD briefly topping the 1.3000 handle. Get your market update from @RichDvorakFX here: https://t.co/npXT9wfyk4 https://t.co/TRYp5RHWVw
  • British MPs to vote on PM Boris Johnson's #Brexit bill Tuesday 7PM local UK time $GBP #MeaningfulVote
  • The Government has published the EU Withdrawal Agreement Bill which will be debated by members of parliament tomorrow according to Sky $GBPUSD
  • Canadian Dollar Price Outlook: USD/CAD Nearing Confluent Support Zone https://www.dailyfx.com/forex/fundamental/article/drivers_of_price_action/2019/10/21/canadian-dollar-price-outlook-usd-cad-nearing-confluent-support-zone-js53-cad-chart.html https://t.co/2V03DZZeVE
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 0.03% Oil - US Crude: 0.00% Gold: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/HZO5HK4CR4
  • $CAD notably firmer on election day with USD/CAD briefly dipping below the July 31st low (1.3105). Get your market update from @JMcQueenFX here: https://t.co/gXSBZURclY https://t.co/UBbam5SlMj
  • "Japanification is the logical consequence of the wrong application of mainstream macroeconomics." "What is worse is that prolonged monetary easing tends to lower productivity growth by keeping inefficient businesses alive" $JPY $USD $EUR $AUD
  • Central banks adopting wrong lessons from 'Japanification' - former BoJ Governor Shirakawa "I am puzzled by the spread of this Japanification. Have Western economists and policymakers not learned the lessons for avoiding it from Japan's own experience?" https://t.co/ozCG12Lyjp
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.98%, while traders in Germany 30 are at opposite extremes with 76.63%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/gPJhm7FUS6
Crude Oil Price Outlook Mired by Death Cross Formation

Crude Oil Price Outlook Mired by Death Cross Formation

2019-07-03 03:30:00
David Song, Currency Strategist
Share:

Oil Price Talking Points

Oil prices have failed to retain the advance following the Group of 20 (G20) summit, and the advance from the June-low ($50.60) may continue to unravel as a ‘death-cross’ formation takes shape.

Crude Oil Price Outlook Mired by Death Cross Formation

The recent weakness in the price of oil appears to be catching traders off guard as the Organization of the Petroleum Exporting Countries (OPEC) and its allies plan to regulate the energy market well into 2020.

It seems as though the extension of the OPEC+ alliance was not enough to keep oil prices afloat amid the weakening outlook for global growth, and the group may have little choice but to clamp down on production especially as the US and China, the two largest consumers of crude, struggle to reach a trade deal.

Image of OPEC crude oil demand forecast

In turn, OPEC and its allies may take additional steps to balance the energy market as the most recent Monthly Oil Market Report (MOMR) highlights slower consumption for 2019.

Until then, the lack of urgency to further reduce outputs may continue to drag on crude, with recent developments raising the risk for lower oil prices as a ‘death-cross takes shape.’

Crude Oil Daily Chart

Image of oil daily chart

  • Keep in mind, the broader outlook for crude oil is no longer constructive as both price and the Relative Strength Index (RSI) snap the bullish trends from earlier this year.
  • At the same time, a ‘death cross’ formation has taken shape as the 50-Day SMA ($58.54) crosses below the 200-Day SMA ($58.62), with both moving averages tracking a negative slope.
  • The string of failed attempts to close above the Fibonacci overlap around $59.00 (61.8% retracement) to $59.70 (50% retracement) has pushed crude prices back below the $57.40 (61.8% retracement) pivot, with the next area of interest coming in around $54.90 (61.8% expansion) to $55.60 (61.8% retracement).
  • Next downside hurdle comes in around $51.40 (50% retracement) to $51.80 (50% expansion) followed by the overlap around $48.80 (38.2% expansion) to $49.80 (78.6% retracement).
  • The RSI also offers a bearish signal as the oscillator snaps the upward trend carried over from the previous month.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss key themes and potential trade setups.

For more in-depth analysis, check out the 3Q 2019 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 markets the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES

News & Analysis at your fingertips.