WTI crude oil futures trade lower on Monday morning after oil prices edged higher on Friday, but closed the week with a small loss despite the issues over
WTI crude oil futures trade lower on Monday morning after oil prices edged higher on Friday, but closed the week with a small loss despite the issues over global supply.
Traders followed the recent developments between the US-North Korea that might affect oil prices.
According to The International Energy Agency, OPEC’s compliance cuts had fallen to 75% last month, the lowest since the deal began in January.
The bearish EIA data was released a day after OPEC monthly report that showed production rose further in July, led by Libya, Nigeria and Saudi Arabia.
Crude oil 4H chart which has formed the “Elliot wave” pattern. This is a confirmation of the fifth-wave which is usually in the direction of a larger trend and is expected to continue towards $55.
According to the above pattern, crude oil prices might rally in the days to come which would repeat the longest move of 1st and 3rd waves. Traders need to pay attention to the most important rule – fourth Wave should not break below first wave high at $47.
The daily chart has formed the Megaphone chart pattern as prices failed to hold above resistance line at $50. The current price trades below the 200-day long term moving average which indicates neutral momentum. A break above the slope line would lead towards $53-57. If prices won’t break above the slope line, then we can count it as a sign of caution that prices may reverse. The next target would be at $47.24-$45.50.
The Crude oil weekly chart has formed “Inverse head and shoulder chart pattern”. The neckline support is at $48.50 which was broken and signals a buy opportunity.
According to the Pattern, after a breakout prices come back to retest the support at $48.50. The stop loss will be below the new support level at $39 and the profit target will be at $62.