Oil Technicals, Daily, Weekly & Monthly

<p>The rally in oil (US WTI & Brent) began in late June, while the uptrend in equities started earlier, after the bottom in early June. […]</p>

The rally in oil (US WTI & Brent) began in late June, while the uptrend in equities started earlier, after the bottom in early June. But oil has outperformed the S&P500 since July, rising 4%.

US crude oil shows signs of exhaustion on the daily chart, testing and failing to break above its 100-day moving average for the fourth straight day, which could see a pullback towards an interim support of 90.60, followed by the June 28 trendline support of 89.80. This may lead to the first weekly decline after two consecutive weekly gains. The aforementioned 89.80 is backed by the 200-week moving average of 88.15, which is likely to hold into month end, considering markets’ reluctance to re-engage into any considerable bout of risk-off mode before the Fed conference in Jackson Hole later his month.

Upside is capped by interim barrier at 94.70 (last week’s high), followed by more considerable pressure point at the 100-DMA (96.10). The high profile resistance remains at the 200 DMA, now at 97.30.

Monthly oscillators rest on a stable and positive trajectory, which (so far) supports the case for an extension towards 97.00 before the end of September. But any aggressive gains in August and September are seen capped at 101.20 and 99.35 respectively.

Ashraf Laidi BlogClick Image to Enlarge

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.