WTI vs. US dollar; Bullish above 50-DMA vs. Bullish pin bar?
|WTI continues entertaining traders' and hedge funds' expectations of higher prices towards $60 per barrel, however, the commodity has been traded during the last 3-months in a $5 range from lows to highs.
On the latest wires, via Reuters, "U.S. drillers added oil rigs for a sixth consecutive week, extending a nine-month recovery as shale producers ramp up spending to take advantage of a recovery in oil prices. Drillers added five oil rigs in the week to Feb. 24, bringing the total count up to 602, the most rigs since October 2015, energy services firm Baker Hughes Inc reported on Friday."
The Fed knows it knows nothing
As of writing, WTI Crude Oil (Nymex) quoted $54.00, down -0.83% on the day or -0.45 and Brent Crude (ICE) posted on the ticker $56.03, down +0.97% on the day or -0.55.
Technical levels to consider
In terms of technical levels, upside barriers are aligned at 55.20 (high Jan.3), and above that at 56.70 (high Jul.3.2015). Later, supports are aligned at 52.90 (50-DMA), next at 50.60 (100-DMA) and finally below that at 48.40 (200-DMA).
On the long-term view, as noted via Bloomberg, "People are starting to wonder what happens after that. An ABN Amro Bank economist says “prices could easily go back to the low $30s,” which reminds us of Goldman’s startling prediction in September 2015 that oil could go below $20. (It didn’t.)"
To the upside, resistance barriers are aligned at $55.22 (high Jan.1), and above that at $60 (long-term 38.2% Fib). To the downside, supports are aligned at $50.70 (low Jan.1), later at $48.40 (short-term 61.8% Fib) and finally below that at $47 (long-term 23.6% Fib).
The greenback – gauged by the US Dollar Index seems muted 'at 50-DMA gates' which contributed to a sell-off across the board (this represents the 4th attempt during the last 8 trading sessions). However, the bullish tone hasn't been diluted as long as the buck holds 100.20 handle. Now, there is technical evidence to expect either a break above 101.60 or sell-off towards the 100-DMA near 100.20.
In term of technical levels, upside barriers are aligned at 101.40 (high Feb.23), then at 102.10 (high Jan.16) and above that at 102.40 (high Jan.9). Meanwhile, supports are aligned at 100.20 (100-DMA), later at 99.60 (low Feb.6) and finally below that at 98.54 (low No.11). On the other hand, today's daily candlestick seems to emulate a 'bullish pin bar' could translate in one more attempt to challenge its 50-DMA.
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