Market News & Analysis
Crude is Quietly up 1%
Joe Perry October 9, 2019 11:03 PM
As the markets patiently await the next headline regarding the US-China trade talks, WTI Crude Oil is quietly up 1% at 53.20 since the open, down from earlier levels at 53.63. Crude oil is sensitive to trade related headlines. The oil market is taking the view that better trade relations between the US and China equals a pickup in manufacturing, which in turn, equals more demand for crude oil. Talks overnight have picked up slightly with China saying it will agree to buy $10 million worth of soybeans.
After retracing 61.8% of the move from the October 3rd, 2018 highs to the December 24th 2018 lows, WTI Crude has been in a large trading range, primarily between 53.25 and 63.75. However, since September 13th, price has been moving lower and last week tested the 61.8% retracement level from the highs on April 23rd to the lows on June 5th at 51.40, for the 4th time! Each time price tested this level it bounced.
Source: Tradingview, City Index
On a 240-minute chart, one can see clearer how price has been drifting lower since to September 13th highs. Price briefly broke out of the bottom of the channel and traded down to 51.06, putting in a daily hammer candlestick formation. This is considered to be a 1 candle reversal pattern. As we see so often, once we fail to break out of one side of a channel, the other side is often tested. That was the case here, as price moved to the top of the channel and put in an evening star formation, which is a 3-candle reversal formation candle. However yesterday, price broke back out of the top of the downward sloping trendline and is currently trading above it today.
Source: Tradingview, City Index
First resistance level is previous highs and horizontal resistance at 54.01. Above that there is horizontal resistance at 54.85. Third level of resistance is the 38.2% Fibonacci retracement level from the previously mentioned timeframe at 55.78. Support is back at the breakout of the channel near 52.80. Next support level is was down at 51.06, spike low on October 3rd.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.