Is oil buying the hype around positive trade talks?
A couple weeks ago I published this descending triangle. Today, I'm republishing the same triangle, but this time with some kickers...
Fundamentally, oil doesn't seem to be buying the hype surrounding all this "good" news about trade talks resuming in October. Yesterday, oil shot up right at triangle resistance, then came right back down for a bearish pin bar (even though candle stayed green). Today, the candle is red, but making a bullish pin bar. What does oil want to do?
This commodity is highly sensitive to world economic conditions, currency valuation, and regulatory issues. However, right now the China/USA trade war is affecting oil prices the most. Supply and demand!! The 2 largest economies in the world are caught up in a tit-for-tat tariff ridden trade war. This does not bode well for oil - if the 2 largest economies slow their business down with each other due to tariffs, then less oil (fuel) will be needed to transport goods... ships, trucks, trains, etc... Not too mention, there was already concerns over too much oil supply; this trade war, in theory, increases that oil supply because not as much will be needed.
I'm going to stay neutral on oil until after the next round of trade talks in October. Then I will re-evaluate.
Fundamentally, oil doesn't seem to be buying the hype surrounding all this "good" news about trade talks resuming in October. Yesterday, oil shot up right at triangle resistance, then came right back down for a bearish pin bar (even though candle stayed green). Today, the candle is red, but making a bullish pin bar. What does oil want to do?
This commodity is highly sensitive to world economic conditions, currency valuation, and regulatory issues. However, right now the China/USA trade war is affecting oil prices the most. Supply and demand!! The 2 largest economies in the world are caught up in a tit-for-tat tariff ridden trade war. This does not bode well for oil - if the 2 largest economies slow their business down with each other due to tariffs, then less oil (fuel) will be needed to transport goods... ships, trucks, trains, etc... Not too mention, there was already concerns over too much oil supply; this trade war, in theory, increases that oil supply because not as much will be needed.
I'm going to stay neutral on oil until after the next round of trade talks in October. Then I will re-evaluate.