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WTI Crude Oil – rally continues?

WTI is rallying nicely chasing global stock markets and in same fashion this rally has stuck as all eyes on US-China trade talks. Market shrugged off the the earlier reported crude supply glut and has fully focused on Washington talks headlines. As I am writing this, on Friday morning WTI is sitting around 57.50 and refusing to go up.

Markets are awaiting for the signing of MOU between US and China and more details that could reveal some lights on agreements.  Also it is widely expected that Trump is going to meet the Vice Premier Liu He during Friday afternoon. Among driving factors are also supply cuts by the OPEC+ and the US sanctions on Iran and Venezuela – which may also give some impulse to the upside move. May be.

WTI 4 hour chart

Technically, rally is still having room to go up, all the way to 59.80. This is where the selling pressure will increase dramatically and price will arrive to resistance cluster 59.80-61.00. I expect rally will stope somewhere in this area.

Below the rally is underpinned by strong support area 54.00-54.70. Price will likely to correct to this area before attempting to go up again.  Another strong support is 52.00 and this one is strong enough to temporarily  contain any further correction. 

Enter the long  trade at 54.00-54.70 support area and scale further into position at 52.00 if price goes below.. This is a tactical long, provided that we were patiently awaiting for the price to correct to this support area before attempting  to continue rally.  

I always prefer to follow the trend. However, there is also a short trade opportunity here: if the price break up and approaches 59.80 resistance. Enter short and scale into position at around 61-62.

Have a nice weekend,

Fuad