FxWirePro: WTI crude bears resume at stiff resistance, 3-black crow still imminent - Uphold directional hedge ahead of US EIA’s inventory check

WTI crude oil’s bullish price sentiments are somewhat exhausted after a strong rise through most of February. As a result, WTI CFDs has spiked about 6.02%. 

But for now, ahead of the US EIA’s inventory reports, WTI crude bears seem to have been resumed.

The EIA’s previous levels showed that crude oil production reached 12 million barrels per day (mbpd) for the first time last week. Crude oil output has dipped to -8.6 mbpd from previous 3.7 mbpd, while consensus was about 2.8 mbpd.

Technical and Candlestick Patterns: WTI crude’s bullish engulfing pattern at $46.57 levels, has taken-off rallies above 21-DMA, but the bears resume at the stiff resistance of $57.93 levels. The selling pressures are boosted by both the momentum oscillators, RSI and stochastic curves show downward convergence to the mild price dips to indicate overbought (OB0 pressures.

On a medium-term perspective, sharp rallies have been observed after bottoming out at $42.40 levels. The interim upswings, for now, are restrained below 21-EMAs (refer monthly chart).

The major downtrend continuation seems to be on cards as both technical indicators signal weakness on this timeframe. The consolidation phase took place upon hammer & dragonfly doji formations at $33.73 and $33.87 levels but 3-black crow pattern has occurred at $45.40 levels to counter with steep slumps below EMAs, the bearish pattern coupled with the bearish signals of technical indicators still signal weakness (monthly plotting).

Overall, one could foresee topsy-turvy swings the major trend of this energy commodity in 2019 and more dips likely on the intensified OB pressures & bearish MACD crossover in the near term.

Trading Recommendations: Contemplating technical rationale, we’ve advocated initiating longs in NYMEX WTI June 2019 and short NYMEX WTI December 2019 spread on hedging grounds at - $1.19/bbl in the recent past, with the target of +$2/bbl and stop loss of -$2/bbl

Currency Strength Index: FxWirePro's hourly EUR spot index is inching towards -19 levels (which is mildly bearish), while hourly USD spot index was at 129 (highly bullish) while articulating (at 10:42 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex