Thursday, November 7, 2019

USOIL

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Fundamental Highlights


Bearish close for WTI in yesterday’s session at $56.36 after printing an intraday high at $57.81. Gains were capped as signs of trouble surrounding the Trump-Xi summit are mounting, with the phase one deal now confirmed to be signed outside the U.S and may possibly drag towards December. As expected, EIA crude oil inventories released yesterday showed oil stockpiles rose by 7.9 million barrels vs. expectations for an increase of 1.5 million barrels. This combination of negative factors (reduction in demand forecasts, and inventory build ups) have now paved the way for further downside in energy prices.

Technical Analysis

WTI ended yesterdays session with a daily bearish engulfing candle, after testing our resistance level at $57.21 before retracing back to our support level at $56.22 on the back of EIA inventory figures. A breach of S1 is likely to push WTI prices lower to S2 at $55.85 which coincides with the 200-period SMA on the hourly chart. Bullish momentum is preserved as long as our medium term uptrend holds. An hourly close above $56.5 will have prices retrace to test R1 at $56.58

Support: 56.22/ 55.85 / 55.50
Resistance: 56.58/ 57.21/ 58.19

Chart (H1)
USOIL