Crude Oil Trades below 23.2% Retracement while Investors await EIA Report
On Wednesday, the oversold crude oil prices took a U-turn to above $66 in order to complete 23.2% Fibonacci retracement at $68.55. This morning, crude is trading slightly bearish after sharp gains in the previous session, pressed down by a surprise jump in the U.S. crude oil inventories. Today, our focus as investorsis likely to stay on EIA report as it may offer something to trade during the New York session. Here’s the trade plan…
On Wednesday, the API reported a massive build of 1 million barrels inventories, compared with analysts’ expectations for -525,000 barrels draw.
What to expect from EIA?
As discussed on May 31 – Economic Event Report, the EIA (Energy Information Administration) will report the stockpiles data. Analysts expectation is -0.4M which is much less than a 5.8M build last week. Considering the positive correlation between API and EIA reports, can we expect a bearish report also from EIA? We need to be ready for it.
What’s on the Technica Side?
On the technical side, we can see crude oil has entered the strong bought zone on the 2-hour timeframe. A slight retracement of up to $67.70 can get us another round of buyers until 38.2% Fibonacci level of $68.55. Alternatively, a violation of $67.70 can push if deeper towards $66.80.
Crude Oil – 2 Hour Chart
We also have a 50- periods EMA crossover above 67.90 which is supporting the bullish trend of the oil.
WTI Crude Oil – Trading Plan
The idea is to stay bullish above $67.70 to target $68.40 before the release of news. We may have an update after the EIA report, so make sure to revisit for update forex trading signals. Good luck!
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