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Crude Oil Prices Reach Resistance Ahead of NFP

Crude Oil Prices Reach Resistance Ahead of NFP

Walker England, Forex Trading Instructor

Talking Points:

  • Crude Oil Prices Reach Resistance Ahead of NFP
  • A Breakout Above $52.00 Eposes 2017 Highs at $55.67
  • Sentiment Figures Flip Negative; IG ClientSentiment Totaling -1. 14

Crude oil prices continue to rebound for this week ahead of tomorrow’s NFP (Non-farm Payrolls) data release. Expectations are set at 180k for tomorrow’s event, and any deviation from this value may send commodities markets reeling. Last month’s NFP release saw employment figures beating expectations, which directly sent crude oil prices to form new weekly and monthly lows.

Technically, crude oil prices are now resting right beneath a value of key resistance ahead of tomorrow’s news. The $52.00 handle had previously been a point of support for crude oil, but after a price breakdown in March this point is now considered a point of resistance. If crude oil continues to rally above this point, traders will next look for a breakout to carry crude towards new 2017 highs over $55.67. In the event that prices are rejected near present values, traders should first look for crude oil to trade beneath its 10 day EMA (exponential moving average) at $50.62. A bearish move below this point would suggest a shift in the commodities short term trend, again allowing trader to target new lower lows.

Crude Oil Price, Daily Chart with 10 period EMA

(Created Using IG Charts)

Current sentiment totals for Crude Oil Prices (Ticker: US Crude) are negative, with IG Client Sentiment reading at -1.14. While sentiment is relatively neutral with 46.8% of traders net long, it should be noted that sentiment values recently flipped negative for the first time since February. If prices breakout higher during tomorrows NFP event, traders may look for sentiment to push towards new negative extremes of -2.0 or more. Alternatively if crude oil prices decline, it would be likely to see IG Client Sentiment totals flip again to show a positive reading.

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--- Written by Walker, Analyst for DailyFX.com

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

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