WTI Crude Oil Price Analysis for July 30, 2020

Free $100 Forex No-Deposit Bonus

WTI crude oil has formed lower highs and found support around $40.65 per barrel to create a descending triangle on its 1-hour chart. Price just bounced off the resistance and looks due for a test of support.

The 100 SMA is crossing below the 200 SMA to indicate that the path of least resistance is to the downside or that support is more likely to break than to hold. Price is also moving below both indicators as additional confirmation that selling pressure is present.

A move below the triangle support could be followed by a drop of the same height as the chart formation, which spans $40.65 to around $42.50 per barrel.

RSI is on the move down, also confirming that sellers have the upper hand. However, the oscillator is also dipping into the oversold region to signal exhaustion among bears and a possible return in bullish pressure. Stochastic is also closing in on the oversold region to show that sellers need to take a break, and turning higher could mean that buyers are taking over.

WTI crude oil is under downside pressure even after the EIA report printed a surprise decline of 10.6 million barrels in stockpiles. This is in contrast to the projected gain of 1 million barrels and the earlier increase of 4.9 million barrels, suggesting healthy demand.

Risk aversion seems to be gripping higher-yielding assets these days, as the flight to safety intensifies on account of pandemic concerns and geopolitical tensions. Fears that another wave of lockdown measures could be imposed on account of a resurgence in the number of confirmed cases in several parts of the globe are weighing on commodity prices.

Also, the Fed refrained from adjusting monetary policy or giving any indication that further easing is in the works, keeping risk appetite in check. The US advance GDP report is coming up next.

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.