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Crude Oil Peaking Out Of Range

Yesterday, our forex signal on the crude oil was very succcessful. The market reversed right after placing a low of $50.85 (our take profit level), but unfortunately, it didn't close our position due to spread. That's why I closed it manually securing around 40 green pips.

Today, our second forex signal on the crude oil remained successful as it closed at our take profit level, helping us gain another 24 pips.

 

Now, what's in the market for us?

At this moment, the black gold is trading sharply bullish at $51.67, right below a strong resistance level of $51.70. If you are looking for a reason behind this bullish wave, honestly, I've checked and can't find a solid reason anywhere.  

On the contrary, the Energy Information Administration (EIA) released the Natural Gas inventories, showing a build of 2 Billion Cubic feet (Bcf) over the last week. The data was supposed to work as a headwind for crude oil because natural gas and oil oftentimes accompany each other.

WTI Crude Oil - Daily Chart

WTI Crude Oil – Daily Chart

 

Technical Outlook

In the 4 – hour chart, we can see a double top pattern completing at $51.70. The leading indicator RSI (above 70) is also signaling the overbought situation. So is it a time to sell?

I'm not sure because if we switch to the daily chart, the scenario is quite different. The crude oil has crossed above 61.8% Fibonacci retracement level, which means buyers are still considering buying more. In addition to this, the prices are holding above 50 periods moving average.

Forex Trading Signal: I'm going to wait for today's closing before recommending a fresh trading signal on crude oil. Perhaps, I would sell it to capture only 25 – 30 pips, but that would be risky.

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ABOUT THE AUTHOR See More
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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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