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Oil Takes a Beating as Agreement Eludes

By:
Colin First
Updated: Sep 28, 2016, 08:38 UTC

Oil had to be the star of the show yesterday. For long, it had been sidelined among the commodities as Gold and sometimes even Silver, stole the show. But

Oil Takes a Beating as Agreement Eludes

Oil had to be the star of the show yesterday. For long, it had been sidelined among the commodities as Gold and sometimes even Silver, stole the show. But this week has to belong to Oil with the oil producers meeting going on in Algiers. Some of the traders and investors were expecting some kind of a deal during this meeting so that they could cut the production output in order to improve the prices of oil.

But anything that involves money, that too huge sums of it, isnt always straightforward and when you mix money and politics, that combination is potent. Thats what we saw at the meeting where, despite concerns about the low oil price, the producers could not come to a conclusion on the smaller details of the agreement as each of them had a separate agenda of their own. So, they failed to reach and agreement and with the near future on an agreement looking bleak, oil price took a beating yesterday. It went as high as 46 yesterday but then promptly dropped down to its previous support at 44.40 and has since been consolidating in the region. For today, with not much major news scheduled, we expect Oil to consolidate and continue to range.

Oil Hourly
Oil Hourly

Gold also took a cue from Oil yesterday and we had pointed out in our forecast yesterday that the more time Gold took to make a break for 1350, the more the risk of it dropping back down to 1320 and thats what happened. Gold couldnt make a bullish breakthrough and the buyers got tired and simply gave up and now we find Gold slowly making its way downwards towards 1320. For today, we expect the support at 1317 to hold and Gold will continue to consolidate between 1330 and 1317.

Silver also took a beating yesterday, as with other commodities and dropped through supports and consolidates at 19.07 as of this writing.  The region between here and 18.70 is a region where a large number of buyers lurk and so it may be a good idea for bears to take off some of their sells in this region. It could also be a good idea to load on some buys at the lower part of this region. For today, we can expect silver to hold 18.7 and bounce from this region.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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