Crude oil on the path upward

OPEC scheduled to meet in Algeria this month on 23rd September. The meeting will discuss how the OPEC member and non-member coalition will approach production distribution. Previously, OPEC eased production cap in July and agreed to increase production to 1 million barrels per day (bpd).

Traders could expect tension in the meeting but the main issue at hand is the projection that all combined production of members and coalition might not be able to reach market demand. Traders might want to stick to the long side especially under current fundamental issue.

On another hand, U.S trade war issue and The Fed rate-hike projection brought U.S dollar to new high. The upward movement of U.S dollar also pressured crude oil prices. We might see temporary weakness in crude oil but the overall direction is upward.

Click here to see Oil July analysis

New Month

Monthly chart

The 50% Fibonacci Retracement has been surpassed in April this year. However, the bull could not widen the distance from the Fibonacci level and stuck near it. Crude oil is in a neutral situation but has a bullish bias as the price hovering above the monthly SMA 200.

Weekly chart

The only concern on the weekly chart is the formation of a lower high. The bear could revert the trend to bearish if a lower low printed on the chart. However, we have weekly SMA 200 present below the level and the level will provide support if the price manages to break lower.

Daily chart

The overall direction of crude oil on the daily chart is bullish but the price currently testing the support level. There is no bullish reaction yet from the level and traders suggested to stay sideway for now. $66.88 and the red trendline expected to provide support and become the levels where the bull print a bullish candlestick pattern. If the price breakout below it then daily SMA 200 is the level to watch.