WTI Crude Oil Faces Strong Resistance Around $62.50

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The price of WTI Crude Oil has been trading on a relatively sideways movement since the start of the month oscillating between $61.00 and $62.50. The WTI Light Crude Oil rallied to hit a yearly high of about $66.60 on April 23, 2019.

It then pulled back early this month to trade at a multi-week low of about $60.04 before making the latest rebound. And now, that rebound appears to suffer from a lack of momentum as it faces strong resistance at a key level.

WTI Crude Oil Fundamentals Overview

The price of oil is very reliant on production and supply expectations for the foreseeable future. A strong US dollar can also have a significant impact at times but usually unsustainable for long periods.

Looking at the latest numbers, the weekly EIA Crude Oil Stock Exchange balance turned positive for the previous week with 5.43 million barrels compared to -0.800 consensus estimate.

In the previous period, the EIA Crude Oil Stocks Exchange balance was 3.963 million.  This shows that there was an increment in inventories in the US, which is not good for oil prices. From a fundamental perspective, the bears will be more optimistic as the week draws to a close.

WTI Crude Oil Technical Analysis (the 60-min Chart)

Technically, the price of oil appears to be trading within a converging wedge, which suggests there could be a short-term consolidation. Light Crude Oil also appears to be facing three levels of resistance.

The first is imposed by the key level $62.50, which appears to have established strong resistance over the last two weeks. The second is the trendline resistance as demonstrated using the upper trendline and the third is the Relative Strength Index.

The price of Oil currently appears to be trading close to the overbought level in the 60-min chart above. This could trigger a pullback.

The bulls will target profits at around $62.96/$63.00 level while the bears will have multiple opportunities as demonstrated using the Fib retracements in the 60-min chart.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the price of oil appears to be making a major pullback following the most recent rally, However, as demonstrated in the char, there is still room to run up above before it can recover fully from the plunge experienced late last year.

Again, both the bulls and the bears will have multiple opportunities in the next few weeks as demonstrated using the Fib levels.

In summary, the price of oil appears to have hit a brick wall in the short-term. But in the long-term, there is still a lot of room to run up top.

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