Friday, January 24, 2020 6:10 AM EDT
OIL PRICE (CLUSD) SEARCHING FOR SUPPORT AS SELLERS DOMINATE
The price of crude oil has fallen over 16%, high-to-low, since the $65.48/bbl. high print on January 8 with the price collapsing through trend support and all three moving averages. Last week’s strong surge in supply was partially offset by this week’s reduced supply but demand may soon be hit lower as the coronavirus outbreak continues. Ten cities in China are now in lockdown, restricting the movement of over 33 million people, while flights have been suspended to contain the deadly virus. This is weighing on oil with aviation fuel demand expected to fall, while Chinese economic activity will also be hit by the lockdowns. China recently said that the number of virus-related has risen to 25, while over 800 people have been infected.
Crude oil touched a near three-month in Thursday’s sell-off, having conclusively broken through the 200-dma the day before. The next level of support comes off an old higher low at $53.86/bbl. and this may hold especially as the CCI indicator shows the market in oversold territory. Below here, a cluster of minor higher lows before stronger support between $50.50/bbl. and $51.00/bbl. comes into view. This level has held for over one year. The current price, $55.70/bbl. is also just above the 38.2% Fibonacci retracement ($55.56/bbl.) of the 3 Oct 2018 high ($76.81/bbl.) to December 2018 low ($42.44/bbl.) slump and again may prove supportive.
CRUDE OIL DAILY PRICE CHART (MAY 2019 - JANUARY 24, 2020)
(Click on image to enlarge)
Disclaimer: DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis ...
more
Disclaimer: DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis on the currency, commodity and index trading community. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one of the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
less
How did you like this article? Let us know so we can better customize your reading experience.