WTI Crude Technicals – Failure To Break 97.75 To Haunt Bulls

The slight recovery seen in US stocks helped send prices of WTI Crude and fellow risk correlated assets higher yesterday. Prices received further boost at the end of US session when American Petroleum Institute released its weekly report which reflected an increase in 384,000 barrels in Crude Inventory. Surveyed analysts expected the official numbers from Department of Energy to be north of 2.5 million barrels, and the huge disparity between the private survey suggest that implied demand for Crude is actually higher than market previously thought.

Hourly Chart


However, despite all the bullish factor given above, price is still unable to breach the soft ceiling of 97.75. It appears that a test of the aforementioned resistance may be possible in the next few hours, but the odds of a break has now been lowered given that US stock futures are actually trading lower, suggesting that we could see a return of selling activities when US market open in a few hours time.

From a technical perspective, Stochastic readings are hinting of yet another bearish cycle signal after the recent failed signal, which incidentally came off the back of a 97.75 rejection. Hence, conservative traders may wish to wait for prices to push below 97.4 in conjunction with Stoch curve pushing below 75.0 as a sign of stronger bearish conviction.

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu