WTI Crude Oil Price Analysis for Aug. 6, 2020

Free $100 Forex No-Deposit Bonus

WTI crude oil continues to trend higher on its 4-hour chart as price formed higher lows and higher highs inside a rising channel. Price is testing the resistance and might be due for a pullback to support next.

Applying the Fib retracement tool shows that the 61.8% level lines up with the $40.50 per barrel minor psychological mark and the 200 SMA dynamic inflection point. A larger retracement could test the channel bottom closer to $40 per barrel while a shallow pullback could draw buyers from the 38.2% Fib that lines up with the mid-channel area of interest.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support levels are more likely to hold than to break. If that’s the case, crude oil could recover to the swing high at $43.48 per barrel or the top of the channel closer to $44 per barrel next.

RSI is turning lower from the overbought zone to signal a return in selling pressure, and the oscillator has plenty of room to move south before reflecting oversold conditions. Similarly stochastic is heading lower, so price could follow suit as bearish momentum picks up.

Crude oil got a boost from better than expected inventory data from the Department of Energy as it was reported that a draw of 7.4 million barrels was seen last week. This suggests that demand remains stronger than expected, even with several businesses still on scaled down operations due to the coronavirus pandemic.

Looking ahead, risk appetite could determine where crude oil is headed next as strong NFP data might spur consumer confidence and lift higher-yielding assets like commodities. At the same time, the promise of more stimulus from the Trump administration could also keep businesses optimistic enough to increase purchases of energy and fuel.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.