On the technical side, the price on the cable chart has found resistance on the upper band of the Bollinger bands and has since corrected to the downside, with today’s candlestick ticking to the upside at the time of this report. The 50 SMA has crossed is still trading well above the 100 SMA, indicating the bull movement is still strong, while the Stochastic oscillator is near its extreme oversold level, further supporting the narrative of the bullish movement still in effect. Today’s session is rather important to see where it will close, since it is trading exactly on the 23.6% of the daily Fibonacci retracement level so a close above the current level could indicate the continuation to the upside. On the other hand, if we see further corrections to the downside we might expect some support around the $1,24 price area which consists of the psychological support of the round number, the 50 day moving average & the lower band of the Bollinger bands.

USOIL, daily

The price of oil edged up as optimism about tightening supplies from OPEC and its allies supported crude prices. The supply reduction from OPEC that was planned to start in May is one of the main factors contributing to the price pump that we witnessed in early May for the “black gold”.  Recession fears reignited for the US economy, since talks over the U.S. government’s debt ceiling were postponed and concern is growing over another crisis-hit regional bank, which also helped boost the price of crude oil in the short term outlook.  U.S. energy secretary Jennifer Granholm signaled that the country could repurchase oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale next month , meaning higher demand from the world’s top oil consumer which could result in pushing the price to the upside.

From a technical standpoint, the price is in an overall bearish movement for the last month with a minor correction happening in early May. The 50 day moving average is trading below the 100 day moving average, further confirming the bearish momentum in the market for crude oil, while the Stochastic oscillator rebounded from its extreme overbought level on Thursday. If the price continues on its downward trend projectile, we might see some support around the $68,50 price area which consists of the 78.6% of the daily Fibonacci retracement level. In the event that we see yet another correction to the upside, then major resistance could be possibly found around the $74 area, which consists of the psychological resistance of the round number, the 50% of the Fibonacci retracement level and is also just below the 50 & 100 SMAs.

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