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prices off nearly 5% from the September high- Decline approaching support Check out our new 4Q Crude Oil projections in our Join Michael for Live Weekly Strategy Webinars on Crude Weekly Chart
Technical Outlook: Crude has continued to trade within this broad dating back to 2015 with prices rebounding off confluence support at the 75% line last week. Critical resistance remains at 54-55, where former trendline support converges on a host of Fibonacci considerations and the early opening-range high.
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Crude Daily Chart
A near-term pitchfork extending off the yearly lows further highlights the at 49.20/40 a region defined by the 200-day moving average, former trendline resistance extending off the yearly high (red) and the lower parallel (blue).
The advance has broken back above the monthly open at 51.57 and is now approaching near-term resistance at 52.39. While we could get another pullback from these levels, the focus remains higher while above the lower parallel.
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Crude 240min Chart
Notes: A closer look at price action shows crude holding within a near-term channel off the monthly lows with the weekly opening range taking shape just above channel support / 51.19. Interim resistance stands at 52.39/45 with a breach above the monthly opening-range highs at 52.79 needed to fuel the next leg higher targeting the yearly open / 100% ext at 53.80/94.
Bottom line: prices remain vulnerable for a near-term pullback here but I'll be looking to fade weakness into structural support. Look for definitive break of the monthly opening-range to offer further guidance on the medium-term crude outlook.
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A summary of shows traders are net-short Crude Oil- the ratio stands at -1.12 (47.2% of traders are long) Weak bullishreading Long positions are 1.3% lower than yesterday and 11.0% lower from last week Short positions are 2.8% lower than yesterday and 6.0% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil - US Crude prices may continue to rise. However, retail is less net-short than yesterday but more net-short from last week and the combination of current positioning and recent changes gives us a further mixed Crude trading bias from a sentiment standpoint. See how shifts in Crude retail positioning are impacting price trends-
Other Setups in Play
- Written by Michael Boutros, Currency Strategist with DailyFX
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