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WTI Crude oil – time to retreat ?

Impressive crude rally is about to end, in my opinion. Trump continues his Twitter attacks on OPEC though the effect is less and less visible. Yet, it is one of those “fundamental” factors that traders should consider. Being very sensitive to crude oil rise, Trump is very much trying to suppress this rally as much as he is trying to boost stock markets. Lot’s of geopolitics here.

The bid tone weakened in the US session yesterday after the EIA reported an inventory increase of 7.2 million barrels for the week to March 29. Market participants were expecting  much smaller reading and this is  a very  strong headline.

Our technical view is consistent with the presented picture of daily chart – the rally is about to reverse, at least temporarily.  Price has arrived exactly to the point of strong resistance at 62.80. This is an upper border of priceline space.

WTI daily chart

This setup is normally signaling that we can expect price retreat  even though another rally attempts are possible. I say attempts because, especially, beware of false breaks-outs above 62.80. However, smaller time frame charts are also heavily overbooked, so I think another impulse up is unlikely. I am projecting the correction to go towards 58.20 but again , trading is not a precise science.

I am short from current levels and will place my stops at  approximately 64.00. This will give me peace of mind, however, I believe current setup is quite reliable.

Have a nice day,

Fuad