Bottom line: WTI Crude long term structure continues to remain bullish against $0.01 lows since March 2020. The commodity had hit major resistance around $43.75 in August and reversed lower through $36.15 mark. Further, it has managed to carve a lower high around $41.46 levels as bears might be preparing to resume lower.
Fundamental Outlook:
DAX had dropped over -3.67% yesterday managing to close around 12635 levels. Global markets had reversed sharply with Dow Jones, SPX500, and FTSE down by -2.06%, -1.30% and -2.73% respectively. Geopolitical risks over Brexit, COVID-19 infections rising across countries, run up to US Elections, might keep markets vulnerable going forward. The safe haven US Dollar might be a beneficiary over the next several weeks.
Gold had reversed sharply after hitting $1973 highs over the last week. The yellow metal faced selling pressure and dropped through $1882 lows yesterday as the US Dollar gained. Going further, the metal might remain under pressure break below $1862, the August 12, 2020 lows.
WTI Crude Oil prices have been on the receiving end since printing highs at $43.75 last month. Oil prices had dropped through $36.15, early this month before seeing some bids. The commodity trades just below $40.00 mark and might remain under pressure as global demand declines over a possible second wave of COVID-19 infections.
Technical Analysis:
WTI Crude seems to have carved a lower high around $41.46 mark last Friday. Bears might be preparing to push prices lower towards $30.80 and $25.50 in the near term. Bottom line for the above bearish structure to hold is that $43.75 resistance remains intact.
WTI Crude had remained in control of bulls since $0.01 lows in March. The commodity had managed to carve a series of higher highs and higher lows through $43.75 levels in August. The above rally could be retraced in a meaningful way, before bulls could be back in control.
The fibonacci 0.618 retracement of above rally is seen toward $16.50/60 levels. High probability remains for a bullish bounce if prices managed to reach there. A short term bullish bounce might be expected $26.80 mark, which is fibonacci 0.382 retracement of the above rally.
Most traders might be preparing to initiate fresh short positions around $39.50/40.00 resistance zone, with a protective stop above $43.75 and projected targets below $30.00 levels respectively. Only a consistent push through $43.75 would change the above bearish structure.
Prepared by
Harsh Japee, Technical Analyst.
WTI Crude Chart
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