Bearish EIA Report, Bullish Crude Oil - What's Going On? - Forex News by Strategia Forex

Bearish EIA Report, Bullish Crude Oil – What’s Going On?

Posted Thursday, June 29, 2017 by
Arslan Butt • 1 min read

The bearish data didn't seem to work out for crude oil sellers. The crude oil surged nearly 1% on Wednesday, the highest level in more than a week. Our forex trading signal remained a success, though it was quite a risky trade before the EIA report.

The US Energy Information Administration (EIA) announced crude stocks increased 118K barrels last week. However, their weekly production dropped from 100K bpd to 9.3 million bpd (bpd stands for barrels per day).

The black gold prices soared after the EIA’s report, despite that the data showed a build rather than a draw of 2.6 million barrels. The global supplies are still plentiful despite the production cuts by top producers.

Moreover, due to the negative correlation between the commodities and the US dollar, the investors felt safer investing in crude oil, which is cheaper for international importers due to weakness in the US dollar.

 

Forex Trading Signal – Idea

Investors are recommended to stay in selling only below $45.05, with a minor stop loss of 10- 15 pips above it while having a take profit at $44.75.

Crude Oil - 4 Hours Chart WTI Crude Oil – 4 Hours Chart 

 

Key Technical Drivers

On the 4-hour chart, the oil has formed a double top pattern which is clearly extending a solid resistance at $45.05. The Doji candle on the 4-hour chart indicates that buying pressure is getting weaker and we may experience a slight reversal ahead of further bullish movement. Though, it's a risky trade. That’s why we have intentionally set a minor stop loss.

 

CryptoCurrencies – Coming Soon

Aside from gold & crude oil, we are about to add more instruments such as CryptoCurrencies. Stay tuned for new analysis & forex signals!

 
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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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