A Swing Trade Setup in The WTI Crude Oil – Higher Supplies In Focus

What’s up, traders.
The WTI crude oil prices plunged to $65 after a recent change in fundamentals dominated the market. Thereby, the technical indicators are lining up for a really cool trade setup. Who’s up for it?

Quick Fundamental Update

1) Crude oil prices slipped as surging U.S. crude production and expectations that OPEC members will boost supplies remained in focus. Let us recall that since last year the U.S. crude production has been increased to record levels.

2) The recent increase in the demand for U.S. dollar is also hurting the dollar-denominated commodity. The buck is gaining strength over better than expected nonfarm payroll data. With the release of positive macroeconomic events, the market is expected a rate hike from the Federal Reserve. The next FOMC meeting is due on July 13 and until then, investors are very likely to underpin the dollar. As you know, the stronger dollar leads to bearish trends in the WTI prices.

WTI Crude Oil – Technical Setup

On the daily timeframe, you can see an ascending triangle pattern which was violated back in April 2018 at $65. Today, crude oil is trading at the same price as it was two months ago.

Crude oil is testing a bullish trendline support near $65. But the recent two candles are strongly bearish which are keeping me away from opening a buying position. Perhaps, we may see a continuation of a bearish trend. Let’s wait for a bearish breakout.

The violation of $65 can help us secure up to 100 pips on the crude oil as the next support prevails at $64. But in case, the oil manages to hold above $65, the bullish reversal will be strong until $68.

WTI Crude Oil – Trade Idea

It will be nice to stay bearish below $66.15 with a stop above $66.350 and a take profit of $65.35. Good luck!

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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