WTI tumbled on Wednesday after China said that it will impose tariffs of 25% on USD 16bn worth of US imports, a retaliation to the US announcement on Tuesday that it will proceed with similar measures on the 23rd of August. Although crude oil will be exempted from China’s list, several other oil products are still included. What’s more, the slide may have been amplified by the less-than-expected decline in crude inventories reported by the US Energy Information Administration.

From a technical standpoint, the tumble brought the price below 66.30 for a while, to find fresh support near 65.80, before rebounding back above 66.30. The 66.30 barrier has been acting as the lower bound of a short-term sideways range that’s been containing the price action since mid-July and thus, bearing in mind that the price recovered back within the range, we will stay sidelined for now.

We would like to see another attempt for a dip below the range’s lower end, or even better yesterday’s low of 65.80, before we start considering the likelihood for further declines. Such a dip is possible to open the way for our nest support territory of 64.25, defined by the lows of the 19th and 21st of June.

That said, WTI would still be trading above the long-term tentative uptrend line drawn from the low of the 21st of June 2017 and although the short-term picture would appear to be bearish, we would like to see a decisive close below that line and the 63.40 support level before we start examining the case of a longer-term trend reversal.

Indeed, taking into account the sanctions imposed to Iran by the US on Monday, there is a decent chance for any further declines in oil prices to stay limited on speculation of supply disruptions. Although this round of sanctions will not directly target Iranian oil exports, a second one, which will focus on Iran’s oil industry, is planned for November. On top of that, using his twitter account, US President Trump said that “Anyone doing business with Iran will NOT be doing business with the United States”, further adding to concerns over supply shortfalls.

Now if the bulls decide to take charge from current levels and not let WTI to exit the short-term range again, we may see a test near the 67.15 line soon, the break of which may target our next resistance of 68.10. Another break above 68.10 could open the way towards the 69.15 line or the upper bound of the aforementioned range, at around 69.90.



Boost your performance with JFD Brokers’ proven DMA/STP. Don’t change your style, change your broker!



The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.

78% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure: https://www.jfdbank.com/en/legal/risk-disclosure

Analysis feed

Latest Forex Analysis

Editors’ Picks

GBP/USD runs through 1.2850 on Brexit hopes

GBP/USD is trading at daily highs above 1.2860 price zone, despite UK GDP missed expectations with an increase of only 0.3% QoQ. Comments from UK's Javid saying "fundamentals strong," and other's from Nigel Farage, supporting Conservatives, underpinned Pound.    


EUR/USD stabilizes above 1.10 amid trade pessimism

EUR/USD is trading above 1.10, stabilizing after falling on Friday. President Trump has expressed pessimism about reaching a deal with China.


USD/JPY trims losses, rises back above 109.00

The USD/JPY pair trimmed losses over the last hours amid a recovery of the US dollar and despite the decline in equity prices in Wall Street.


AUD/USD looks to end day modestly lower near 0.6850

The AUD/USD pair lost 50 pips last week and started the new week under modest bearish pressure as the AUD struggled to find demand amid the uncertainty surrounding the United States (US) - China trade conflict and falling copper prices.


Gold rebounds from multi-month lows, trades around $1,455

After posting its largest weekly percentage drop of the year and erasing more than $50, the troy ounce of the precious metal remained under pressure on Monday with the XAU/USD pair slumping to its lowest level since early August at $1,452.

Gold News

Forex Majors