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Crude Oil Dips Below 100 SMA – 61.8% Retracement on the Cards

It’s all about the trade war between China and the US. Recalling the G7 meeting, Trump gave a heads up about another round of tariffs on Canada, along with hefty tariffs on $50 billion woth of Chinese imports, starting on July 6. Whereas, China responded that it would repay by putting duties on several American commodities, including oil. This move caused a drop in U.S. stock markets, but supported the crude oil prices.

WTI Crude Oil – Technical Outlook

For the reason discussed above, crude oil soared to $66 to test 100 periods SMA on the 4-hour chart. The trading area of $66-$66.30 is a very solid resistance zone as you can see, but despite the strong fundamentals, crude wasn’t able to break through.

 

WTI Crude Oil - 4 Hour Chart

WTI Crude Oil – 4 Hour Chart

For the moment, crude oil is heading south to complete 50% retracement at $64.75. Below this, oil can gain support near 61.8% at $64.50. That’s the point where I will be looking for a buying position.

In addition, don’t forget to monitor the API weekly crude oil report at 20:30 (GMT) as this may offer us a quick move to catch.

WTI Crude Oil – Trading Plan

I will be looking to stay bullish only above $64.85 with a stop below $64.50 to target $65.50. Good luck!

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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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