WTI Crude Oil Jumps on Weaker Dollar – Bullish Engulfing Pattern Eyed
Crude oil began the week with a moderate gain in response to an announcement from Treasury Secretary Steven Mnuchin that the trade war between the U.S. and China has been “put on hold” for the time being. However, the recent gain in the oil price is lead by the weakness of the dollar. Here’s our forex trading signal…
WTI Crude Oil – Fundamental Outlook
Early in the Asian session, the U.S. dollar came under selling pressure despite the absence of economic catalysts. It looks like the investors are unwinding their position to secure profits in the overbought currency.
For all the newbies, there’s a negative correlation between the dollar and crude oil prices. Since crude oil is denominated in the dollar, a weaker dollar makes the crude oil cheaper for global investors. Thus, they increase the demand, perhaps in order to stock it for future use. That’s what is making crude oil bullish today.
WTI Crude Oil – Technical Outlook
Crude oil is trading in the overbought zone after a series of bullish fundamentals. Yet the candlesticks analysis is suggesting a bullish bias of investors. WTI is consolidating above $72.45 support on the 2-hour chart and has formed a bullish engulfing pattern which is signaling the dominance of bulls. Crude can face an immediate resistance at $72.75 along with a resistance at $72.45.
WTI Crude Oil – Trading Plan
Today’s forex trading signal is to stay bullish only above $72.45 and target $73.15. Whereas, selling is preferred only below $72.45. Good luck!
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