WTI Crude Oil Locked in a Tight Range as OPEC Meeting Kicks Off

July for the Oil bulls was great. They managed to close the month on a local highs and in the same time broke many important resistances. August so far is not so good as the second half of the previous month. Data from the inventories and stockpiles up to date is mixed but in general slightly worse than expectations. On Friday, we additionally received another bearish factor here so a stronger USD after the better NFP. Markets are currently await the OPEC/Non OPEC meeting that starts today.

Till the 26^th and 27^th of July, despite the price going up, the situation here was still bearish. We were below the mid-term down trendline (pink) and inside of the wedge (blue lines, bearish). All that was giving higher chances for a downswing. Situation changed when we broke the upper line of the wedge and then the down trendline. That killed the sell signal, at least for now. Currently, the price is very accurate in respecting the two Fibonacci lines: 50% and 61.8%. First one is a support and second one is a resistance and we are now closed between those two and waiting for a breakout. From the price action point of view, bullish breakout should trigger a buy signal with the potential target on the 52$/bbl (green). Breaking the 50% should get us to the next Fibonacci, so 38,2% and possibly to the lower line of the recent wedge (blue).

As for the general sentiment I think that in the long-term it is still negative, at least as long as we stay below the black down trendline. On the other hand, currently in the short term, the upswing is equally possible as the drop.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis