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Tag: CL_F

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Crude Oil Price Ready For A Boom

Globally, the crude oil price fell to 42.52 in December 2018 which occurred last in June 2017. Price of $CL_F holds a strong support at the same level. In 2018, $CL_F price maintained a resistance at level 73.43 since November 2014. All gains in 2018 were lost when a fall in price began in October. The year 2019 started on a good note for oil with the $CL_F price all bullish.

Crude Oil Daily Chart

A breakout from the trendlines has occurred giving hopes for the $CL_F bull market. At two different instances in 2018, RSI shows oversold positions. As we watch the $CL_F bulls get into the market in large numbers, price has been bullish for about 3 weeks. The price is not overbought and might not show trace of being overbought soon. There are indications that the price of $CL_F could reach 69 in a few months time or go beyond that. The Ichimoku has shown a bullish future which occurred last in November 2018. Price has crossed to the upper region of the Bollinger band indicating the bull power is dominant.

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Crude Oil Price Finds A New Resistance

Innovations coming up daily have brought about decline in demand for crude oil across the world generally. We are now entering the most active months of the hurricane season in the Atlantic Ocean. Even though weather scientists are forecasting that the 2018 hurricane season will not be nearly as active as 2017 and 2016, the Hurricane Gordon is forecasted to be heavy in October.

It has come to my understanding that not all hurricanes enter the Gulf of Mexico, but when they do, many oil companies will take precautions and shut down their offshore production and evacuate personnel before the hurricane hits. A trace of Hurricane Gordon, which came through the Gulf of Mexico on Tuesday and Wednesday, forced producers to shut down 9.23% of oil production in the Gulf and 9.06% of natural gas production from the northern Gulf of Mexico.

Over 45% of the total U.S. refining capacity is located in the Gulf. Hurricanes and other storms can cause flooding, sometimes severe, that has caused refineries to shut down. In 2017, the largest refinery in the United States, Saudi Aramco-owned Motiva, shut down for 2 weeks after Hurricane Harvey causing severe flooding in Port Arthur, Texas. Other refineries only closed for a few days during and after Hurricane Harvey.

Meanwhile, there is already a breakout downward both with the RSI and Ichimoku. It is presently around $69 to a barrel and might find a new support at $65. For the most part of August, 2018, the price of crude oil was on the rise. Sellers might become active due to these indicators.

Sources: Hurricane storm threat (Investing.com)

Crude Oil Price Drops (CNBC.com)

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Is This The Bottom?

Last week, I was on the air live with Dale Pinkert, host of FXStreet’s Live Analysis Room. My episode is down below. It’s always fun talking GBP with Dale because he always has insights to share with me as I do with him. His experience in futures on top of the forex always leads to a good conversation. The interview never feels like an interview. Just good trading talk between friends.

The interview took place the day before the September non-farm payrolls dropped. You’ll hear us talk equities quite a bit. With the weakness in the $SPX, I explain why the $GBPJPY was actually looking to fall further to 174.86 and possibly even as low as 167.99. But the weakness in the NFP report may change everything. Apparently, Yellen and the $FED did know something we all didn’t know. The recent global malaise in China, Syria and Brazil are, in fact, starting to show ripple effects in the U.S. economy. And if this economic weakness becomes a trend, interest rate hikes out of the Federal Reserve are off the table. Probably completely. Definitely for 2015. The lack of wage growth and the less-than-expected jobs growth has finally convinced markets that the $FED is not moving on interest rates. In fact, whispers of QE4 are back. Expect that drum to beat louder if the U.S. economy starts to show more weakness in the months ahead.

Looking at the $GBPJPY as our equities proxy, the Friday close above the 181.00 support level is a bullish signal in light of the strong close in the S&P 500. Watch here:

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The Setup of the Year?

Though I don’t trade commodities, I have to agree with CEO Technician here. Oil does look very interesting here. Then I think about the implications of a bounce in oil on the forex market. Everyone is bearish oil. The decline broke key support levels with price going for this long-term, big-time support level around $75. While the USD had its own strong reasons to rally, the weakness in oil did serve as a nice tailwind.  Now as price heads into a huge support zone, can oil continue to weaken?

All eyes on crude.

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