Crude traded lower yesterday following the bearish rejection by the 104.5 resistance, which was fueled by the overall bearish sentiment which drove Stocks lower. However, despite the overall bearishness, prices remained supported due to concerns over Tropical Storm Karen approaching which has shut down a few off-shore oil rigs who have removed personnel as a safety precaution. This marks the 2nd day non-economic news have supported oil. On Wednesday, the TransCanada Crop announcement regarding the Keystone pipeline completion sent market into a bullish hysteria. Yesterday’s news wasn’t as great in terms of magnitude, but nonetheless prevented a swift and painful drop as fundamentally the rally to 104.5 was basically uncalled for.
Currently prices is trading below the soft intraday resistance of 103.7, and favors a move towards 103.0 should the swing low of 103.35 is broken. Even though Stochastic readings have only recently show a bullish cycle signal, Stoch curve is currently flattening ahead of the 40.0 “resistance”. Hence the possibility of stoch curve making a u-turn here is high, which affirms the 103.7 resistance. Similarly, if price does break 103.7, it is likely that the 40.0 stoch level will be broken, and we could see bullish acceleration towards 104.50.
It is the same for Daily Chart, where price is still awaiting a break of either 104.5 or 102.0 for directional guidance. Stochastic readings favor a bullish move but the Stoch curve should ideally clear the 35.0 level before stronger bullish conviction can emerge, which will likely coincide with price pushing above 104.5 as well.
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