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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Heads Up:🇯🇵 Capital Spending YoY (Q4) due at 23:50 GMT (15min) Previous: -10.6% https://www.dailyfx.com/economic-calendar#2021-03-01
  • 🇯🇵 Unemployment Rate (JAN) Actual: 2.9% Expected: 3% Previous: 2.9% https://www.dailyfx.com/economic-calendar#2021-03-01
  • The US Dollar is trying to break higher versus ASEAN currencies. The Singapore Dollar, Philippine Peso, Thai Baht and Indonesian Rupiah are under pressure. Will follow-through last? Find out from @ddubrovskyFX here:https://t.co/JOWG9q01q0 https://t.co/onzZoGNQf6
  • Heads Up:🇯🇵 Unemployment Rate (JAN) due at 23:30 GMT (15min) Expected: 3% Previous: 2.9% https://www.dailyfx.com/economic-calendar#2021-03-01
  • Retail CFD traders (via IG) have flipped net long on the $SPX for the first time since the Pandemic low almost a year ago: https://t.co/yWRLZk5mym
  • ...also for those without kids or are not inherently young at heart, March 2nd is Dr. Seuss's birthday.
  • The price of gold struggles to retain the rebound from the start of the week as longer-dated US Treasury yields hold above pre-pandemic levels. Get your $XAUSD market update from @DavidJSong here:https://t.co/zE7NafvfTq https://t.co/4BxMT0iyi1
  • Uh oh. Another financial product/meme pivot. I think Elon is just a BTD kind of guy who is in tune with the social trading trends and wants to bring the retail crowd along with him. Would fit the essence of Tesla and Space X https://t.co/EP9zj1rXzU
  • Canadian #Dollar Forecast: $USDCAD Bears Fail at Support- March Levels - https://t.co/XkyFns8odx https://t.co/8Q4Tu0viz0
  • I feel the LaserEyes trend is a more effective social spread because of the visual impact. Kind of disappointed the community hasn't gotten a more tangible visual cue for BTD / BTFD. Or maybe there is one and I'm just behind the trend....which happens a lot recently
Crude Oil Price Forecast: Early 2017 Volatility Pattern Arises

Crude Oil Price Forecast: Early 2017 Volatility Pattern Arises

Tyler Yell, CMT, Currency Strategist

Access Free Oil Trading Guide from DailyFX Analysts HERE!

Talking Points:

  • Crude Oil Technical Strategy: rising wedge should alert bulls
  • Watch for move to and possibly through key support on early-2017 pull backs
  • Crude inventory gains on DoE data opens up focus on delivered OPEC cuts

A core observation of the current state of the Oil market is that short sellers have been nearly wiped out as we trade near 17-months highs and aggressively bullish options have risen. Naturally, the development of the OPEC and non-OPEC production cut accord in late November through mid-December was critical through this. However, we’re now a week away when the production cuts are going to be verified as they are set to go into effect in the New Year. We recently argued that Saudi’s hand may have been forced to cut due to capacity issues that were made aware in a Reuters report.

We are now trading at the top of a channel drawn with the same slope as the support that we had been focusing on throughout the 2016 rebound and into 2017 (rising trendline in black on the chart above) drawn from the first higher low off the rebound from the February low. While we remain Bullish due to fundamental and technical factors, there is a rising wedge pattern developing that should warrant attention.

The rising wedge pattern has developed on the recent break into 17-month highs. Per the Daily Sentiment Index as of Wednesday’s close, the Crude market is composed of 75% Bulls, which remains well short of the 85% extreme Bullish sentiment reading that could mean there is a good deal more room to run in the market as 2017 gets underway. However, if the production cuts do not come to pass, it’s possible that the rising wedge could bring about a sharpsell-off that retraces (likely not all) of the recent 28% rally from the mid-November low.

The wedge pattern is also developing on the RSI(5) below the price on the chart below. A breakdown in RSI(5) over five periods would be indicative of average losses outpacing average gains over the past 5-periods that would likely make way for a sharp retracement that aligns with the price pattern on the chart.

Join Tyler Monday’s at 3 pm EST to discuss key global macro trends like Oil (Free Registration)

A worthwhile lesson to be shared is that there are two types of rising diagonals. Reversal often come after ending diagonals whereas sharp trend advancements develop after leading diagonals. Naturally, it’s difficult to tell which is which beforehand and misinterpreting a leading diagonal as an ending diagonal has been a costly mistake and one that changed how I manage risk when trading.

If we are seeing an ending diagonal, a reversal should develop in the price of Crude Oil, and we’d be on the watch for the price to test the prior resistance pivot range (50/51 per barrel). A break down through the pivot zone would open up focus on the rising support that lies between $47/45. Only a break below this zone would take us from Bullish to Neutral. Until then, we’ll favor eventual upside heading into 2017.

Conversely, a leading diagonal would open up the 2015 high of $62.56. Should price fail to break the $50/51 support zone (highlighted yellow rectangle), we’ll expect an eventual move to the 2015 high in early 2017. Ichimoku also favors a Bullish continuation move.

D1Crude Oil Price Chart: USOIL Sticks Near $51/Bbl. After Extending Further From Prior Channel

Crude Oil Price Forecast: Early 2017 Volatility Pattern Arises

Chart Created by Tyler Yell, CMT Courtesy of TradingView

Key Levels Over the Next 48-hrs of Trading as of Wednesday, December 29, 2016

Crude Oil Price Forecast: Early 2017 Volatility Pattern Arises

T.Y.

To receive Tyler’s analysis directly via email, please SIGN UP HERE

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

DISCLOSURES