Overnight price action showed a light recovery from yesterday’s sell-off lows, but has not indicated a further trend one way or the other. Not surprisingly, on the daily chart the price ran out of fresh buying “steam” below that blue band of resistance and fell back despite some bullish data that could have fueled further rises if the interest had been there. On the Daily we are well and truly back into the range between the upper blue band and the lower red band.
We have had a lot of specific oil data over the last two days with the API and EIA weekly reports and the OPEC monthly report and I suspect today will be quiet in the absence of fresh inputs. Of course, on the geopolitical front things are so intense at the moment that surprises could occur any time, which would almost certainly create price rises rather than the opposite! With the markets closed tomorrow for Good Friday, I would certainly not think of keeping a short position open right now. The 4H chart is showing a compression stage where the price is simply stalling for a while and consolidating whilst awaiting new impetus - but the underlying trend is still clearly up.
The hourly chart at present is pretty much saying the same story. The blue pipeline ribbon has turned up, signifying that the current down move is (at least temporarily) over, but the yellow/green bands are still indicating that this is a flattening out rather than a turn upwards. This is also indicated by the fact that we are still under the daily pivot line.
If we see an hourly close above the pivot then we may well see a strong finish today, but failing that, then I suspect maybe we’ll see a further drift back down to that red band of support and maybe an insignificant change on the day. But, hey, this is the oil market, and the situation might well be totally different in an hour’s time!
Having gone flat last night before the drop, I am reluctant to get sucked into anything today as any move may well be short-lived. So attention is now diverted to planning the Easter holidays instead. But I am interested to see where we finish today…