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
Bearish
GBP/USD
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
USD/JPY
Mixed
Gold
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
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • #USDollar May Rise if US #GDP Data, #TradeWar Risks Spook Markets https://www.dailyfx.com/forex/fundamental/forecast/weekly/usd/2019/09/21/US-Dollar-May-Rise-if-US-GDP-Data-Trade-War-Risks-Spook-Markets.html
  • Asia #FX markets will be closely watching for developments in the ongoing China-led RCEP trade negotiations against the backdrop of slower global growth and rising protectionism. Get your market update from @ZabelinDimitri here: https://t.co/HZ8Loqj3Ey https://t.co/g332JcY549
  • What are trading journals? How can you create one and reduce your #FOMOintrading? Find out: https://t.co/0akgWbyJEw https://t.co/Xyy7rxZHip
  • 💷 $GBP British Pound Weekly Technical Outlook My latest take on Sterling price action as #Brexit risk comes back into scope. Commentary on the charts and implied volatility table included. More via @DailyFX ➡️ https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/09/21/gbp-to-usd-price-analysis-british-pound-eyes-rise-in-brexit-risk.html https://t.co/Hd6LAurfqG
  • The Singapore Dollar is driven by the Monetary Authority of Singapore, which manages exchange rate instead of short-term interest rates. Learn more on the $SGD and how to trade it from @ddubrovskyFX here: https://t.co/eWLM9XZs5Y https://t.co/SCHhCQhlFV
  • What are the common trading myths which can create #FOMOintrading? Find out: https://t.co/sDbOusCpzg
  • Walk through the new and improved IG Client Sentiment Data with @PeterHanksFX here: https://t.co/FTm5nXIAmq
  • Lessons from Bretton Woods are forgotten, the US-China #tradewar represents a true existential threat to the post-World War II international trade order, and in turn, the globalized economy that has grown out of the ashes of history. More from @CVecchioFX :https://t.co/paaBxX6Xt0 https://t.co/Lk229DNh6n
  • Catch up with @JStanleyFX as he walks through some FX price action setups post-FOMC. Get your recap here: https://t.co/MD2PB33t0L
  • What is the @ecb (European Central Bank)? What are the key mandates of the bank and how can it affect the #forex market? Find out: https://t.co/romV4hPQJv https://t.co/4nlCaUNhpD
Crude Oil Price Correction Stalls Ahead of Monthly-High

Crude Oil Price Correction Stalls Ahead of Monthly-High

2019-08-22 06:30:00
David Song, Currency Strategist
Share:

Oil Price Talking Points

The price of oil struggles to hold its ground even though US crude inventories contract for the first time in August, and the failed attempt to test the monthly-high ($57.99) raises the risk for a further decline as oil continues to track the downward trend from earlier this year.

Crude Oil Price Correction Stalls Ahead of Monthly-High

The recent rebound in crude prices appear to have stalled despite the 2732K decline in US crude inventories amid the weakening outlook for future consumption.

Image of DailyFX economic calendar

A deeper look at the report showed gasoline inventories unexpectedly climbing 312K in the week ending August 16, with stockpiles of distillate fuel also increasing 2610K during the same period.

Image of weekly US field production of crude oil

At the same time, US field production of crude oil sits near the record-high, with output holding steady at 12,300K for the third consecutive week. The data prints may push the Organization of the Petroleum Exporting Countries (OPEC) to curb production beyond 2019, and the group may take additional step to keep crude prices afloat as “world oil demand is projected to rise by 1.10 mb/d in 2019, showing a downward revision of 0.04 mb/d from the previous month’s projection.”

Image of OPEC world oil demand forecast

The most recent Monthly Oil Market Report (MOMR) warns of lower consumption “due to weaker-than-expected oil demand data from OECD Americas, Other Asia and the Middle East,” but it remains to be seen if OPEC and its allies will make a major announcement ahead of the next meeting on December 5 as the group insist that “for 2020, world oil demand is expected to grow by 1.14 mb/d, in line with last month’s projection.”

With that said, OPEC and its allies may stick to the status quo for the foreseeable future, but the lack of response may continue to drag on crude prices as the US and China, the two largest consumers of oil, struggle to reach a trade deal.

In turn, oil prices remain at risk of facing a bear market especially as a ‘death-cross’ formation takes shape in July.

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

Crude Oil Daily Chart

Image of oil daily chart

  • Keep in mind, the broader outlook for crude oil remains tilted to the downside both price and the Relative Strength Index (RSI) track the bearish trends from earlier this year.
  • At the same time, a ‘death cross’ formation has taken shape in July as the 50-Day SMA ($56.28) crosses below the 200-Day SMA ($56.24), with both moving averages tracking a negative slope.
  • More recently, the rebound from the monthly-low ($50.52) has failed to produce a close above the $57.40 (61.8% retracement) pivot, with the lack of momentum to test the August-high ($57.99) bringing the downside targets back on the radar.
  • Failure to hold above the Fibonacci overlap around $54.90 (61.8% expansion) to $55.60 (61.8% retracement) raises the risk for a move back towards the $51.40 (50% retracement) to $51.80 (50% expansion) region, with the next area of interest coming in around $48.80 (38.2% expansion) to $49.80 (78.6% retracement).
  • Will keep a close eye on the moving averages as the 50 & 200-Day SMA’s start to converge, with the crossover warning of range-bound conditions.

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.

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

DISCLOSURES

News & Analysis at your fingertips.