Crude Oil long term technical analysis September 2017

Crude oil struggling for a $50 close

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In the previous analysis, crude oil manages to claim $50 handle in July. However, the bullish advantage erased in August as the price fell below $50.00. The downward movement due to OPEC oil production which should be down after joined efforts by members & major non-member but recorded higher production.

Fortunately, a recent record released on August production show the first decline since March. This is a good news and crude oil prices seen a sharp increase but stay below $50.00. While this article was written, the price hovers at $49.34.

U.S is under attack by hurricanes and severe damage estimated by analyst also officials. Crude oil is one commodity which will experience sharp movement depend on how severe the damage on the supply line. Shutdown and flooding damage could disrupt production thus lowering supply and push the price higher.

Click here to see Oil July analysis

New Month

Monthly chart

Crude oil on the monthly chart show compression and the price has not moved much since five months ago. Traders could expect more sideway movement and more compression in coming months. Depend on U.S crude oil production current short-term outlook turn positive as there might be a shortage in U.S.

Weekly chart

The bull made a solid defense of $47.00 support level where the price never closed below it. Current week candle moves above the bearish blue channel which encourages more buying. If the price could close above it and there is no change in sentiment, crude oil might start a rally toward the red trendline.

Daily chart

There is no other indication from the daily chart aside from bullish spark. Latest candlestick is bullish and ready to challenge $50.00. If the price makes a reversal near the $50.00, then it might find support in the blue area. Buying at the current level is not suggested as it is buying into a resistance level. However, traders could look for a long position if $50.00 is broken.

Trade plan

Bullish trade: Long position needs to wait for a retracement to the blue area on the daily chart. Alternatively, an upside break and re-test of $50.00 could be seen as another bullish opportunity.

Bearish trade: Short position needs to wait for failure from the bull when the price test $50.00 handle. A strong bearish pattern needed before placing the short position.

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