Crude Oil Technical Outlook:
- The fade following the spike may continue next week
- Watch the gap close under 55 for support on weakness
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The fade following the spike may continue next week
Crude oil exploded higher to start last week due to drone attacks on a Saudi oil facility, but the impact lasted not more than a day as price has been fading off since. Barring further geopolitical flare-ups that haven’t already been price in, the fade looks at risk of continuing.
Price found some support on the October 2018 trend-line last week, but looking ahead the real area of support may not be until at least a full reversal and gap-fill down to 54.84, where oil closed the week on September 13 ahead of the attack.
Along the way support may arrive at the 200-day (56.39) and a short-term trend-line off the August low. In the event crude holds onto the recent pullback and begins to make another thrust higher, there isn’t any visible price resistance until price rises up to the spike-high from Monday at 63.38.
Tactically speaking, the trading bias looks like it could be bearish in the week ahead, but be mindful of potential headline risks and keep risk wrangled accordingly.
Check out the IG Client Sentiment page to find out how changes in retail positioning could signal the next price move in major markets.
Crude Oil Daily Chart (fade may continue, watch for gap-close)
Crude Oil Chart by Tradingview
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
