Good afternoon team,
The USD Index is pushing higher, and based on yesterday analysis it should move into new highs creating a risk-off sentiment in the market. USD strength = RISK OFF. With that in mind, and based on how Crude Oil is positioned, it appears as though a rising wedge structure is ready to break to the downside which agrees with the USD strength theory.
On the oil front, OPEC met early hours this morning and agreed to gradually ease production cuts. The OPEC group opted to stick to the plan which was agreed in April, where 2.1 million barrels per day of supply would be brought back to the market between May-July. The increased supply, paired with the global economic recovery could provide some selling opportunity on crude oil, especially at these major resistance zones.
Crude Oil – Daily Charts
Crude Oil has hit another double top zone which could see some profit-taking. There is generally a reaction at major double tops or bottoms. Additionally, the rising channel or possible bear flag could still be in play.
Crude Oil – 4 Hour Charts
The shorter-term time frame is showing a rising wedge structure at the peak, which can indicate a reversal opportunity.
Trade Setup: SELL Market Execution, current price 67.89, stop loss 69.09 and take profit target 65.00 initially.
Stop loss: 120 pips
Take profit: 289 pips
Pricing is the same on Focus and Fusion markets for Crude Oil – MT4/MT5 codes USOUSD or XTIUSD