Crude Oil Broadly Stable – Sellers Eyeing 38.2% Retracement
Arslan Butt • 1 min read
WTI crude oil prices are broadly steady after placing a sharp bullish wave as investors felt a bit of confidence about the US-China trade deal. The US President Donald Trump extended some relief by expressing about his call with Chinese President Xi Jinping and potential meeting next week at the G20 summit in Osaka, Japan. The trade war situation had worsened after Washington accused the Chinese of backing away from previously agreed commitments.
Secondly, the American Petroleum Institute (API) announced a modest draw in crude oil stocks of 812k barrels for the previous week. Today, the EIA estimated that the US inventories are expected to fall by -1.5M, which may add further buying in crude oil. The EIA report is due at 14:30 GMT, but we may see a little movement in the wake of FOMC and Fed interest rate decision today.
Looking at the 3-hour chart, crude oil has entered the overbought zone, forming the double top pattern below 54.35. Crude oil seems to get ready for a bearish retracement, and if that happens, the initial target is likely to be around 53.25 (38.2% Fibo Level) while the bullish breakout can be lead oil prices towards 58 resistance.
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