Crude Oil Trades below 23.2% Retracement while Investors await EIA Report - Forex News by FX Leaders
Crude Oil - 2 Hour Timeframe

Crude Oil Trades below 23.2% Retracement while Investors await EIA Report

Posted Thursday, May 31, 2018 by
Arslan Butt • 1 min read

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

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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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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