US Crude Oil corrects lower on weaker China demand
Although we have seen 7 consecutive weeks of net gains for US Crude Oil, last week's price action posted an indecisive Doji-style candle. This negative momentum has continued into this week.
From a technical perspective, we look to be moving lower within a three-wave pattern. This is common in corrective formations.
Bespoke support is located at $81.23. We have a 61.8% Fibonacci retracement level located at $81.02. We look to this zone to be the first substantial support barrier. Although the anticipated move higher would be deemed corrective, we look for dips to be bought.
Conclusion: Chinese oil imports plunged by nearly 19% in July. This, combined with last week’s larger-than-expected increase in U.S. oil stocks, has weighed on the commodity. We look for this negative momentum to continue into this week with downside support not seen until $81.23-$81.02.
From a technical perspective, we look to be moving lower within a three-wave pattern. This is common in corrective formations.
Bespoke support is located at $81.23. We have a 61.8% Fibonacci retracement level located at $81.02. We look to this zone to be the first substantial support barrier. Although the anticipated move higher would be deemed corrective, we look for dips to be bought.
Conclusion: Chinese oil imports plunged by nearly 19% in July. This, combined with last week’s larger-than-expected increase in U.S. oil stocks, has weighed on the commodity. We look for this negative momentum to continue into this week with downside support not seen until $81.23-$81.02.