USOIL, Daily & H4
A global risk-on backdrop, coupled with robust Oil prices, have been keeping USDCAD a sell-into-gains trade. While NAFTA renegotiations remain a source of uncertainty, talks may potentially play out through 2018, and the trade pact will likely fade to the backdrop until the next round kicks off in Mexico on February 26. Data showed that producing nations that are participating in the OPEC-led supply curtailment accord saw their total production hold near steady in December, suggesting that compliance has remained strong despite the temptation being presented by the recent surge in prices.
USOil fell back to $65 area today from $66.30, unable for 8th time to break above the strong 3-year resistance area at $66.50-$67.00. The break of this resistance area could open the area to 2014 prices and hence to the next resistance level, which comes at $68.70.This week, the future has been seen recoveriong the losses seen in the beginning of the week, down to the 20-Day moving average, at $63.66. Prices are presently at $65.77, correcting some of the 4.1% gain seen since Wednesday’s 11-day low at $63.67.Hence, its today performance points downwards again, with immediate INTRA-day support coming at the clash of 20-period MA and the 50-period EMA, at $64.75-$64.95. Despite the recent Doji and bearish candles seen in the 4-hour chart, the overall picture of Crude Oil, remains on the upside, as demand remains strong, while the price action is moving above all 3 Day MAs (20, 50 and 200 DAy MAs) since October 2017.
As i mention in my post on January 16th “in a longer time frame, the USoil remains at record highs, with Daily Upper Bollinger Bands being extended and Daily momentum indicators configurated positive. The MACD is at 1.92, RSI is moving in the overbought territory at 74, while Stochastic is at 90s area since December 26.Hence, in long-term view, the USoil remains in a bullish trend since December, along with no sign of reversal so far, considering we will not see any break of the future below the $61.00.”
Therefore, today’s weakness could be seen as a “buy the dip” concept, as long as $61 level holds.
IS USoil preparing today to form an inverse Heads and shoulders formation, with another dip lower? who knows! – But USoil will definitely be in our watch list!
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