Weaker Dollar & Output Cut – A Trade Setup In WTI Crude Oil
The crude oil has been trading bullish for four consecutive trading days, and thankfully, our forex trading signals on the crude oil are successfully making their way towards take profit levels.
Even today, the crude oil extended its gains towards an intraday high of $49.31. The bullishness in the energy sector was fueled yesterday when Saudi Arabia, Russia, and Kuwait decided to extend the supply cuts until the end of March 2018.
However, that's not the only reason behind a bullish oil. The weakness in the U.S dollar is also underpinning oil prices. You must be wondering, what does the U.S. dollar have to do with the oil prices?
The crude oil prices are quoted in U.S. dollars, therefore, the foreign companies have to purchase U.S. dollars to make payments to oil companies. If the dollar appreciates in the global market, companies are forced to purchase the dollar, which is costly. They will hesitate before purchasing more oil in order to control expenses & vice versa.
Crude Oil – Hourly Chart
In the early European session, we shared a trading signal to buy crude oil above $49.10 with a stop loss below $48.85 and a take profit of $49.40. At the moment, the oil already has a few pips in profit. In fact, it placed a high of $49.31 after we placed the buy call.
Let's see how the market plays with us. All we need to do is to secure our trades once the oil shows us how to profit. We may have a volatile session ahead.
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