- WTI has been in a progressive trade to the downside and has met a critical support structure.
- The lower end of the $30s is a focus after some ground is clawed back.
At the end of August, the price of WTI was trading close to the $43.75, the highest level since March when COVID hit the charts.
Now, as we progress through the start of October, the price is well on its way towards a medium-term target in the low $30s, based purely on technical analysis as follows:
Since the analysis, there have been a few updates along the way which included trading opportunities as follows:
- WTI Price Analysis: Bears licking their lips for a 1:5 R/R swing-trading opportunity;
- and the end of the week's day-trading story, WTI Price Analysis: Bombs away, breakeven achieved, fading rallies.
As expected from the monthly and weekly charts, the price crumbled which enabled risk-free trading opportunities towards the targets.
The day trading target of 4R (reward) was achieved at $37.26 when the price made a fresh daily low of $36.66.
The swing trade is running risk-free from a touch below $40:
-637371896972778583.png)
If the price action respects structure on the 4-hour time frame, then it's safe to expect the following:
-637374313431668997.png)
On the daily time frame, the Fibonacci's match perfectly with the structure:
-637374315467887107.png)
On the monthly basis, the lower structure is evident in the bottom of the $30s.
-637374333128933043.png)
On the positioning data, money managers sharply reduced their longs from the technical resistance and as news struck that the 2nd wave of COVID infections and the lack of new US fiscal stimulus could well set to slow the rate of the demand recovery.
''The building evidence pointing to OPEC+ increasing their exports and production, at the same time as Libya may restart its oil production, were the supply side set factors convincing specs to grow short positioning and cut longs,'' analysts at TD Securities explained, adding:
''Given that the market is concerned about excess supplies and a reduced rate of inventory declines, it is likely that WTI will remain under pressure and there could well be more length reduction this week.''
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.