The issue for daily oil prices seems to be whether to track a mildly stronger US dollar or respond to the recent, and continuing, gains in equities. Friday’s price action in crude appeared to take the former as the price of oil fell $1.22 to settle at $70.58 per barrel ending the oil trading session on a wide spread down bar with a deep upper wick. Technically oil prices are beginning to falter at this current price band and would appear to be struggling once again to breach the $73 per barrel price point. Indeed Friday’s candle with its deep upper wick merely confirmed this sentiment following a succession of hanging men candles, indicative of both potential weakness and indecision and a reversal to the recent upwards move on the oil chart. The resistance level is certainly adding its own pressure and should we see a break and hold below the $69 price point then this may well trigger further falls, particularly if this is associated with a breach of the 9 and 14 day moving averages. If these factors combine then we may well see a test of the initial support at $68 per barrel and failure here could lead to a deeper move back to $65 per barrel in the short term.
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The short term is bearish, the medium term is sideways while the long term is bullish.
WTI:
Support: $70.36 (Friday’s low) Resistance: $73.35 (high of 30/06/09)
Support: $69.72 (low of 05/08/09) Resistance: $72.88 (Friday’s high)
Support: $69.35 (low of 03/08/09) Resistance: $72.42 (high of 06/08/09)
OIL (BRENT):
Support: $73.13 (Friday’s low) Resistance: $76.00 (high of 06/08/09)
Support: $72.24 (low of 04/08/09) Resistance: $75.55 (Friday’s high)
Support: $71.67 (low of 03/08/09) Resistance: $74.89 (high of 04/08/09)
[...] a previous of -26bn with the deficit probably widening yet again as a result of the recent rise in crude oil prices. Later in the session we have the crude oil inventories, details of which I have covered in the [...]