USOIL/WTI
This week--this month-- has been froth full of fundamental expectations about not only the news, but in a way that has seemingly disregarded us technical analysis who are here and will always be here ready to buy or sell on an opportunity.
The escalating trade tensions (China vs. U.S.) has weighed WTI this week down, however, as I want to make clear it's complicated.
Fundamentals:
In conjunction with a weaker U.S. dollar, we're also seeing this week a drop in U.S. crude inventories. Add in the reinstated factor of the Iran sanctions, and we come to a very complicated scenario with many degrees of variability. The speculation process for how WTI is intrinsically priced in the coming days and weeks is complicated. If we see any form of political retaliation from the Iranians, we will see the price of crude per barrel move higher.
How does one connect and plan fourth so many variables? I'll tell you how. It's going to be to trade with a fluid mindset while balancing the technicals and the fundaments alike.
Technicals:
We held the 200 MA at 60.8. Crude oil technically speaking should be lower. However, the fundamental situation in terms of lost supply can't be made up overnight. Although technically WTI should be trading lower, here at Alchemy FX, we believe that we are at a price where the fundamentals have begun to support price through the simple law of supply (the lack of) and demand.
If we can see a break below the level of $60/ barrel, it will be a quick drop down into the sub-$50 range per 1 barrel of crude oil.
This week--this month-- has been froth full of fundamental expectations about not only the news, but in a way that has seemingly disregarded us technical analysis who are here and will always be here ready to buy or sell on an opportunity.
The escalating trade tensions (China vs. U.S.) has weighed WTI this week down, however, as I want to make clear it's complicated.
Fundamentals:
In conjunction with a weaker U.S. dollar, we're also seeing this week a drop in U.S. crude inventories. Add in the reinstated factor of the Iran sanctions, and we come to a very complicated scenario with many degrees of variability. The speculation process for how WTI is intrinsically priced in the coming days and weeks is complicated. If we see any form of political retaliation from the Iranians, we will see the price of crude per barrel move higher.
How does one connect and plan fourth so many variables? I'll tell you how. It's going to be to trade with a fluid mindset while balancing the technicals and the fundaments alike.
Technicals:
We held the 200 MA at 60.8. Crude oil technically speaking should be lower. However, the fundamental situation in terms of lost supply can't be made up overnight. Although technically WTI should be trading lower, here at Alchemy FX, we believe that we are at a price where the fundamentals have begun to support price through the simple law of supply (the lack of) and demand.
If we can see a break below the level of $60/ barrel, it will be a quick drop down into the sub-$50 range per 1 barrel of crude oil.