Crude Oil Hits Take Profit – EIA Report In Focus!
Arslan Butt • 1 min read
In our previous update Crude Oil Going Crazy, What's Going On, we shared a forex trading signal to stay in sell below $52.10 in order to target $51.45. The market traded exactly as per our forecast to help us secure 65 Pips. Today, all eyes are on EIA reports. Here is a trading plan for Crude Oil for today.
Fundamentals Analysis – WTI Crude Oil
Remember, we discussed the API weekly Crude Oil stock report which was scheduled to release during the U.S. session. The major reason behind a sharp drop in inventories was the U.S. Crude Oil inventories which fell by 761K barrels at the end of last week.
EIA Weekly Crude Oil Stock
At the moment, the American Petroleum Institute (API) is awaited to release the stockpiles figures at 14:30 (GMT) with a forecast of the 2.9M draw.
How to Trade EIA Report?
I often discuss the correlation between API and EIA reports. These usually 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. In contrast, the build in inventories (up to 6M) will cause sharp selling of nearly 60-100 pips. Refer to FX Leader News Trading Strategy to ensure profitability.
Crude Oil – 3 Hour Chart
Crude Oil Trading Plan
Today, I'm eyeing $51.95 as it's a key level to determine the bullish and bearish trend. Taking a buy position is preferred with a target of $52.50 and $52.85. It's better if we wait for the news before taking any position in the Crude Oil today.