FxGrow Daily Technical Analysis – 17th May, 2017
By FxGrow Research & Analysis Team
Crude Oil Recoups Over OPEC's Positive Signs, Awaiting U.S Inventories
Crude Oil managed to reimburse $4.12 since last Monday where crude plunged to $45.52 bp, and today, oil clocked $49 high bp with failure to close above 200-EMA (D1) for three consecutive daily sessions, leaving daily trend to sideways with more tendency to bullish taking into consideration that oil has a support by a rising (H4) trend line.
Oil prices were highly fluctuated during May 2017 between U.S and OPEC with apposed interests keeping lower price (U.S) and higher price (OPEC).
U.S managed to plunge oil price over several consecutive API reports indicating a significant increase in U.S crude inventories, and this week some positive and promising signs were signaled by OPEC and particularly by Non-OPEC counties, as sharp response to the U.S.
Iraqi Prime Minister Haider al-Abadi said in a news conference broadcast on state TV late-Tuesday, Iraq is committed to reducing oil production to decrease a glut in the global market, and will support extending oil output cuts in line with any OPEC decision, Reuters reports. Russian compliance rate was estimated by 77%. Meanwhile, the OPEC’s compliance rate is 96%.
Russia and Saudi Arabia agreed earlier this week to prolong the output cut deal till March 2018 and along with, A proposal to extend an OPEC and non-OPEC supply cut for nine months is a positive idea, sources familiar with Iranian thinking said, suggesting OPEC's third-largest producer is likely to go along with such a plan if there is a consensus. Kuwait, a Gulf producer usually aligned with the Saudi OPEC view, said on Tuesday it supported the proposal. The Iranian position is less predictable, however, as it was the only OPEC member allowed to increase its output under the supply cut deal and holds presidential elections on Friday. (Reuters)
Today, U.S is due to release weekly crude inventories at 2:30 PM GMT which will settle oil levels technically, but fundamentally, OPEC efforts seems to be more fruitful with more bullish tendency as an impact. Currently U.S-Oil is trading 48.85 intraday.
Resistance levels: R1 49.58, R2 50.43, R3 51.61
Support levels: S1 48.00, S2 47.00, S3 45.67
Comment: Closing above 49.00 confirms the bullish momentum. A penetration for R1 stretches additional bullish waves seeing R2&R3 destination. Closing above 49.00 is positive. Closing below S1 hold bearish setbacks and retracements as a reminder of 9th may lows. OPEC cut-deal should be a stand by motion as a spot news with major impact. Also, U.S Inventories will give a better perspective on how crude oil trend will behave.
MACD indicates bearish momentum but a penetration for R1 level will shift bullish.
RSI indicates Bullish momentum.
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