Crude Oil Finding It Hard to Break Above $90 – Bearish Breakout Soon?
Skerdian Meta • 2 min read
Crude Oil has been climbing for about a week, following the crash last Wednesday after the US CPI inflation report was released, which showed another increase in August, sending the USD higher and risk assets lower. Although, the larger trend still remains bearish for crude Oil since June, as the global economy continues to weaken while central banks continue to raise interest rates in a frenzy.
Oil prices continue to remain weak today amid potential diminishing demand from recession in the US. Fears of rising interest rates, which could lead to an economic recession, knocked prices down. Higher-than-expected inflation on Wednesday in the US triggered concerns that the Federal Reserve could continue to make large-scale rate hikes.
Crude Oil H4 Chart – Sellers Testing the 20 SMA
The 100 and 200 SMAs have been rejecting Oil this week
According to their zero-Covid policy, China introduced new lockdown measures last week which will hurt the economy further. The slower Oil demand pace in China which is the world’s largest importer is also putting pressure on prices, with strict Covid lockdowns in various parts of the country.
Besides that, the US commercial crude Oil inventories increased 0.6% last week, as yesterday’s report showed. According to data released by the Energy Information Administration on Wednesday, inventories rose by around 2.4 million barrels to 429.6 million barrels, against the market expectation of a fall of around 200,000 barrels, signaling lower demand.
Crude Oil Daily Chart – The 20 SMA Remains As Resistance
The retrace seems complete on the daily chart
So, crude Oil has turned bearish again today, falling more than $2.50, from around $90 to $87.30s. The daily chart also looks quite bearish. The retrace of the last several days seems complete on this time-frame chart and in the last two days, we saw two doji candlesticks, which are bearish reversing signals. So, it seems like crude oIl is reversing lower, so we are thinking about opening sell forex signals soon here.