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MENAFN- Daily Forex)
WTI Crude Oil continues to see a bearish trend take hold in the commodity. After flirting with highs in the middle of this January near 80.000 USD, WTI Crude Oil has seen a rather consistent selling force build. The price of the commodity went into this weekend slightly below 71.000. Tomorrow's price action will open around values WTI Crude Oil was touching late in December.
WTI Crude Oil is being produced in abundance and orders are stable. The simple fact the Trump administration is and will remain pro-active regarding the exploration and extraction of U.S oil and other energy sources will continue to produce rather steady headwinds on the price of WTI Crude Oil . Yes, there will certainly be reversals higher and large orders will often cause some momentary sustained bursts upwards, but looking for sustained challenges to higher price levels for the moment seems unwise.
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Early buying last week which took WTI Crude Oil towards the 75.000 level was certainly painful if a trader had a short position as the market opened, but after hitting the upwards ratios the commodity began a rather easy to define selloff and was near 72.400 and 72.200 towards the end of Monday. By Tuesday WTI Crude Oil was near the 71.500 marks and tested lows near 70.600 which sparked some buying and a retest above 73.000, but by Wednesday the 72.000 level was proving to be durable resistance again.
By late Wednesday WTI Crude Oil was near 71.000 and the remainder of the week saw a rather tight test of value going into the weekend. Speculators now have to decide just how strong is potential bearish sentiment in WTI Crude Oil. Traders may feel confident that sustained higher moves are unlikely, but if this is the case then a question regarding support needs to be decided technically and Finding Advantages in Quick Hitting Moves
A three month technical chart of WTI Crude Oil shows the 71.000 ratio is important. Support has often been seen around 70.000 followed by reversals upwards. However, the move higher in the first two weeks of January do look suspicious, and may have been part of a speculative squeeze upwards. WTI Crude Oil was below 68.000 USD in the first week of December.
Traders have known Trump would be in charge of energy policy since the first week of November. Speculative factors and perhaps some large purchases were the reasons for the move higher in December through mid-January. However, the drop in WTI Crude Oil prices now has effectively brought the commodity back to known price realms.
WTI Crude Oil Weekly Outlook:Speculative price range for WTI Crude Oil is 68.800 to 72.400
As tomorrow's trading starts and the lower near-term realms of WTI Crude Oil are considered, price action below the 71.000 if sustained could be a bearish signal. Support levels near 70.800 to 70.600 should be watched, if these ratios begin to see sustained tests WTI Crude Oil could find that it starts to once again challenge the 70.000 level. The price of WTI Crude Oil has been below this level and has seen lower depths tested. The 70.000 ratio could prove difficult for sellers looking for lower action, they should be careful of volatility these region if seen.
Traders who are contrarian and believe upwards price action is going to be sparked and that the 72.000 mark remains a sticky magnate should be careful. Traders should not get overly ambitious about upwards targets and be willing to cash out profits when they emerge. The 71.500 level would have to be hit and sustained higher to believe the 72.000 level is a legitimate target short-term. And these higher values may be a place bearish speculators may want to wager against if they want to look for reversals lower.
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