Bearish Trends Push Crude Oil Prices to $70: News And Technical Analysis
Crude oil prices are holding steady near the $70.00 mark as bearish sentiment deepens in the market
FUNDAMENTAL OVERVIEW:
- Crude oil remains under pressure, struggling to reclaim the $70.00 level, with further downside expected.
- Traders anticipate prolonged weak demand as markets adjust their expectations for a potential Federal Reserve rate cut.
- Additionally, the US Dollar Index has surged above 103.80 and tested the 104.00 mark, signaling potential for further gains.
Crude oil struggles to maintain stability, fluctuating around the $70.00 mark on Tuesday. The downward pressure is driven by markets adjusting their expectations for potential interest rate cuts by the US Federal Reserve (Fed) in the near future. With diminishing prospects for an aggressive rate-cutting approach, concerns over stunted economic growth and weaker energy demand have surfaced, casting a gloomy outlook for oil prices in the coming months.
The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is consolidating near an 11-week high around 104.00 on Tuesday. The rise in US bond yields has widened the interest rate differential, favouring the US over other key regions like Europe and Asia. This trend supports the DXY, which is expected to climb further in the coming weeks, potentially reaching the 105.00 mark.
The Chicago Futures Trading Commission (CFTC) reported a third consecutive decline in net-long positions for WTI Crude futures, according to Bloomberg.
Additionally, Norway’s oil output in September exceeded forecasts by 1.5%, Reuters reports.
At 20:30 GMT, the American Petroleum Institute (API) will release its weekly Crude Stockpile Change report for the week ending October 18. While no forecast has been provided, the previous week’s data revealed a modest drawdown of 1.58 million barrels.
Read More – Daily Technical Analysis By Capital Street FX
CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Crude Oil is trading within a down channel.
Crude Oil is moving below 10&50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in Selling Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 71.80
Immediate support level: 69.38
HOW TO TRADE CRUDE OIL
After a decline, Crude Oil found support and briefly reversed to the upside. However, it faced resistance from a previous resistance zone, leading to an aggressive sell-off that broke through a major support area. Currently, Crude Oil is making a pullback, testing the resistance zone again. If rejected at this level, the price could resume its downward movement.