Crude Oil Price Technical Outlook: Charts Mired by Confluence - DailyFX
Crude Oil Price Technical Outlook: Charts Mired by Confluence - DailyFX |
| Crude Oil Price Technical Outlook: Charts Mired by Confluence - DailyFX Posted: 28 Sep 2019 09:02 PM PDT CRUDE OIL PRICE FORECAST: TECHNICAL RESOLUTION SOUGHT AFTER BEFORE NEXT MAJOR MOVE
Crude oil continued to edge lower this past week from its recent surge earlier in the month owing to a drone attack on Saudi Arabia's Aramco. That supply shock induced spike in the price of crude oil sent the commodity skyrocketing above prior trendline resistance extended from the April 23 and July 15 swing highs. That said, the lack of follow-through after breaching clear technical levels has occurred multiple times this year, and is a bit concerning when attempting to establish trend. CRUDE OIL PRICE CHART: DAILY TIME FRAME (FEBRUARY 27, 2019 TO SEPTEMBER 27, 2019) Chart created by @RichDvorakFX with TradingView The short-lived jump in crude oil ran out of steam after kissing the 78.6% Fibonacci retracement level of its trading range since the commodity topped out earlier this year around $67.00. Recently, heavy selling pressure has driven the price of crude oil back to major technical confluence around a zone of $54.00-56.00, which is underpinned by the 23.6% and 38.2% Fibs of the previously mentioned trading range. This area is also highlighted by the 50-day and 200-day simple moving averages. CRUDE OIL PRICE CHART: 4-HOUR TIME FRAME (AUGUST 06, 2019 TO SEPTEMBER 27, 2019) Chart created by @RichDvorakFX with TradingView Nevertheless, crude oil bulls will likely look to the bullish sloping trendline formed by the series of higher lows printed since the bottom set in August. A breach of rising support brings the August 26 and September 3 lows around $53.00 into focus, though the door could open for a retest of the August 7 swing low if this last line of defense fails to keep crude oil prices afloat. That said, the RSI and MACD indicators shown above could be signaling fading selling pressure as the commodity bounces off confluent support at the $56.00 price level. Looking to the upside, the mid-point retracement of crude oil's trading range since its August 7 low, in addition to the 50-SMA and 200-SMA, might keep a lid on upside progress. If this area can be topped, however, the 38.2% and 23.6% Fibs of crude oil's recent bullish leg could serve as potential upside peaks before the September swing high comes into scope. OIL VOLATILITY INDEX (OVX) & CRUDE OIL PRICE CHART: DAILY TIME FRAME (AUGUST 07, 2018 TO SEPTEMBER 27, 2019) Chart created by @RichDvorakFX with TradingView Expected oil price volatility – measured through the Cboe crude oil volatility index (OVX) – looks like it could be attempting to turn back higher. The typically inverse correlation between the two is presently positive, but it appears to be drifting back to its typical relationship. Alas, an uptick in volatility could bode ill for the commodity. Nevertheless, a glance at IG Client Sentimentdata could provide traders with a unique look at the bearish and bullish change in biases among retail traders as crude oil price action progresses. CRUDE OIL – IG CLIENT SENTIMENT INDEX PRICE CHART: 4-HOUR TIME FRAME (SEPTEMBER 13, 2019 TO SEPTEMBER 27, 2019) Chart via IG Client Sentiment Report -- Written by Rich Dvorak, Junior Analyst for DailyFX.com Connect with @RichDvorakFX on Twitter for real-time market insight  |
| Posted: 15 Sep 2019 12:00 AM PDT This week's Forex forecast includes EURUSD, GBPUSD, USDJPY, GBPCAD, and Gold (XAUUSD). Watch the video below to find out how Justin Bennett is trading these markets this week! Be sure to also scroll down for commentary and annotated charts.
EURUSD ForecastThe EURUSD played out exactly as anticipated last week. We were watching to see how the pair would react at 1.1060 resistance. I noted that this area would attract sellers while intact on a daily closing basis. I also discussed how 1.0930 would likely act as support. Thursday's session sold off from the 1.1060 region, hit a low of 1.0926, and then bounced back to 1.1063 into the 5 pm EST close. It was a wild session, but one we were well prepared for. For the EURUSD this week, I think it all comes down to whether or not buyers can keep prices above 1.1060 as new support. If they can, it's only a matter of time before 1.1100 breaks to expose 1.1200. However, if the euro closes back below 1.1060, we will likely see the pair lose ground back toward the 1.1020 lows. Want daily videos of the currency pairs I'm trading? Join DPA Today and get exclusive member-only content including one to two new videos every day!
GBPUSD ForecastThis GBPUSD breakout has played out perfectly. Since buyers closed the pair above channel resistance on September 4, British pound bulls have been in control. In fact, GBPUSD buyers have been in control since that September 3 bullish pin bar from support. Last Sunday, I mentioned how I favored longs while above former channel resistance (new support). I also pointed out last week how bulls needed to take out 1.2380 resistance. They did that on Friday. So, for now, that 1.2380 level becomes new support. I still think 1.2570 is a resistance area to keep a close eye on moving forward. It isn't as obvious from the daily time frame, but the weekly shows it well. Alternatively, a daily close back below 1.2380 would be a sign of weakness for GBPUSD. It could also expose that 1.2290 level.
USDJPY ForecastOur game plan for USDJPY last week went off without a hitch. In Sunday's video I said that I favored USDJPY longs while above 106.80 support for a move to 108.00 resistance. The pair bounced nicely from support on Monday and reached our target level on Thursday. Then on the 11th, I wrote that a break higher seemed likely. Notice the second to last paragraph in my post from the 11th. Be sure to watch the video above to see why I favored a break higher. For the week ahead, it comes down to whether or not buyers can keep USDJPY above former channel resistance (new support) near 108.00. If they can, we could see USDJPY move higher to 109.00 resistance. Alternatively, a close back below 108.00 would be a sign of weakness and could even re-expose 106.80. Want access to the same New York close Forex charts I use? DOWNLOAD the charting platform for free!
GBPCAD ForecastWhat a way to close out the week for GBPCAD. This inverse head and shoulders is one I first pointed out on September 9. I even called it a 500-pip reversal pattern. I also mentioned that GBPCAD was nearing breakout territory less than 24 hours before it broke free on Friday. And I still think GBPCAD buyers have more fuel in the tank. However, as I pointed out in the video above, you probably don't want to buy the pair at Friday's close of 1.6600. Just look at the price action at the end of 2018 to see why. One area that could offer some support this week is 1.6430. That level marks the highs from July and could attract buyers if tested. Alternatively, a close above 1.6600 followed by a successful retest of it as new support would expose 1.6960. Just keep in mind that the measured objective for the inverse head and shoulders below comes in at 1.6800.
Gold (XAUUSD) ForecastLast but not least we have gold (XAUUSD). I wrote about gold on the 10th. More specifically, I stated that this rally could be at risk below 1480. That area marks the confluence of support for this market. Now, notice how gold spiked higher last Thursday. That's a perfect example of why being too early to a breakout is a bad situation. That said, there is a reason Thursday's session closed at 1500. It's something I illustrated in the members-only video I posted last week. For the week ahead, I think a daily close below the 1480 region for gold could spell trouble for the metal. I also think it would open up the next key support area at 1450. Want daily videos of the currency pairs I'm trading? Join DPA Today and get exclusive member-only content!
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