USOil Daily
Before I left for holidays I had two open trades, USOil (Buy) and UK100 (Sell). The USOil trade hit Target 2 ($44.55) from my entry at $39.79 and continued all the way to north of $48.50 before turning south again. The UK100 trade was closed on the rally to 6880 from my entry at 6720 in the middle of July.
Today I have re-entered the USOil trade ($46.25) this time on the short side as the psychological $47.00 level and 61.8 fib level were both breached and broken on yesterdays close. Target 1 at $44.55 is above the 38.2 Fib level and a little over the 2 week ATR. However, it is but below the 50.0 Fib level, 20 and 50 DMA which all currently coalesce around $45.50, so expect some resistance here before the move lower. Target 2 at $42.25 and sub $40.00 again, cannot be ruled out.
Alternatively, the $45.50 areal could provide support for a move back to the August high of $48.88 and another attempt to break the psychological $50.00. OPEC sees demand for oil increasing during Q3 and Q4 of 2016 and that higher prices will prevail. The International Energy Forum (IEF) meets September 26-28 in Algeria with OPEC member countries due to meet informally during the event.
Today the crude markets have ignored remarks from the Iraqi PM that he supports proposals by OPEC for a production freeze, which is set to be discussed at next month’s meeting. Most energy analysts have been downplaying prospects for a production freeze due to Iran’s ongoing build up of supply following the lifting of sanctions (production still remains well off pre-sanction levels), which has been irksome to Saudi Arabia.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in: [ujicountdown id=”Next Webinar” expire=”2016/09/01 13:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Stuart Cowell
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
