Oil Bullish on Short Term But Bearish on Larger Charts

Crude Oil has been showing some strong bullish pressure recently but the overall trend is still bearish

Skerdian Meta•Monday, December 26, 2022•1 min read

The 50 daily SMA Oil demand will likely increase in 2024 keeping Oil bearish

Crude Oil was feeling the pressure from central banks raising interest rates pretty fast this year and it reversed down in June, falling to $70 lows in the second week of December. Central banks are slowing down now and they have softened the rhetoric, which has helped the sentiment improve, although most markets remain uncertain as a deep global recession remains well on the cards.

Bloomberg released a poll of economists last week which showed that the odds of a recession have gone up to 70% from 65% in November. As the FED adds to the restrictive policy and raises the terminal rate, it pushes the market toward the recession scenario.

US WTI crude reversed higher but the surge stopped at the 100 SMA (green) on the H4 chart. The 50 SMA (yellow) turned into support for some time and now the price has pushed above the 100 SMA after the jump this week. Yesterday’s large drawdown in the EIA inventories helped crude Oil maintain the bullish momentum, while most other assets traded in a range.

US Crude Oil H4 Chart – MAs Holding As Support

The upside momentum in crude Oil picked up further pace earlier this month and the 20 SMA (gray) is acting as support on the H4 chart. The price bounced off that moving average earlier today in late Asian session but has returned back after the upward revision in the US Q3 GDP figures. So we decided to open a buy Oil signal at this moving average and we’re hoping for a bounce since a better US economy means higher demand for Oil.

US WTI Crude Oil Live Chart

WTI

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.