OIL FORECAST: CRUDE OIL PRICE ACTION UNDERMINED BY POTENTIAL BEARISH MOVING AVERAGE CROSSOVER

  • Crude oil might battle to catch a bid as demand considerations rise with market volatility
  • Oil costs look mired by a bearish crossover of its 50-day and 200-day shifting averages
  • The commodity would possibly face additional promoting strain if dealer danger aversion beneficial properties traction

Crude oil worth motion has slid markedly decrease to this point this month. The commodity is down greater than 10% from August’s closing stage after failing to take out technical resistance across the $43-handle. This decline seems to have invalidated the bullish development fashioned by the sequence of upper lows since Might.

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Sep 15

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CRUDE OIL PRICE CHART: DAILY TIME FRAME (23 APR TO 10 SEP 2020)

crude oil price chart forecast

Chart created by @RichDvorakFX with TradingView

Crude oil costs tumbled decrease alongside a pointy uptick within the S&P 500 VIX Index, or fear-gauge, as demand considerations mount and market sentiment begins to bitter from its seemingly euphoric state. The current inflow of crude oil promoting strain pushed the commodity right down to technical help residing close to the $36.00-price stage, which roughly aligns with Might highs and June lows. Oil worth motion now faces the specter of a bearish shifting common crossover. Particularly, the medium-term 50-day shifting common might begin to roll over and cross beneath its long-term 200-day shifting common because the rebound in oil costs reverses.

Oil – US Crude
BULLISH

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This looming ‘dying cross’ would possibly exacerbate potential crude oil promoting strain going ahead – notably if market volatility continues to tick increased and dealer sentiment deteriorates additional. That stated, crude oil weak spot might speed up if bears can breach the $36.00-handle. This would possibly open up the door to focus on the $31.50-zone as the subsequent doable draw back goal.

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— Written by Wealthy Dvorak, Analyst for DailyFX.com

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