Bullish Breakout in Crude Oil – EIA Figures Ahead!
Arslan Butt • 2 min read
During the Asin sessions, Crude Oil continues to trade sideways after closing our forex trading signal at break-even. The market is muted, perhaps the investors are waiting for the EIA report later today. Here's a trading plan.
Update On API Report
According to the American Petroleum Institute (API) report, it recorded a build of 2.79 million barrels. Was it supposed to be bearish on news? Actually, the economists were expecting a build of 4 million barrels but the actual was well below the forecast.
EIA Report Today
Today, we need to focus on the EIA inventories which are due to release at Crude Oil Inventories 15:00 (GMT).
Previous: During the previous week, the EIA reported a draw of 5.4 million barrels.
Forecast: The inventories are expected to show a build of 4.1 million barrels.
How to Trade EIA Report?
As the API and EIA reports are highly correlated. These often show identical figures. However, we can only benefit if the EIA reports show a divergence.
Let's say if the EIA reports show a draw in the inventories (up to -2M), there will be a bullish spike in the Crude Oil prices for nearly 50 pips. Conversely, the build-up in inventories (up to 6M) will cause sharp selling of nearly 60-100 pips. Refer to FX Leader How to Trade the News Strategy to ensure profitability.
WTI Crude Oil Trade Plan
For now, investors are advised to wait for the U.S. session to trade the EIA Report. Today, below $49.25 Oil has the potential to go for $48.50 and $48.20. Whereas, the break above $49.30 will give us a buying opportunity until $49.90.
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