FxWirePro: Is WTI crude perplexed between short covering or long liquidation?

Crude oil price upswings seemed to have been halted momentarily at $59.67 levels, its bearish streaks in the recent past are threatening the prospects for oil prices, at 1 and a half year low as the energy commodity (WTI crude) price tumbled this month to $56.91 levels but recovered to the current $58.79 levels. 

Well, before proceeding further, let’s just quickly glance through below weblink where we advocated short hedges in the past:

https://www.econotimes.com/FxWirePro-WTI-Crude-Edgy-at-50-Fibos-on-Shooting-Stars-Trade-Tunnel-Spreads-and-Short-Hedge-1444241

Thereby, this glance at our previous post would have given you a comprehension as to how the strategy hedged the considerable slumps in crude exposures by now, had you deployed those WTI futures positions (when crude was trading at $71.35 levels) and rest is history.

Technically, on WTI crude price chart, the bullish engulfing pattern has occurred at $58.82 levels, consequently, the recent rallies have bounced above 7 & 21-DMAs but were halted at 59.67 levels. Shooting star has occurred at that juncture that is now attempting nudge below these DMAs again (refer daily chart). The minor trend appears to be little weaker for now but more rallies from here onwards look dubious as we are yet to get the confirmation from the trend indicators.

On a broader perspective, steep slumps below EMAs on back-to-back shooting star patterns (refer monthly chart), the interim upswings restrain below 21-EMAs & downtrend continuation also on cards as both momentum oscillators signal overbought pressures. 

Although we see some slumps, more rallies seem to be on the cards in the long-run upon most likely hammer/dragonfly doji formation at $58-59 levels, these price dips appear to be perplexed as this price action could only be for the long liquidation.

Currently, at spot reference: $58.88 levels, as the market tone is troublesome, we note that the continued decline in crude oil with WTI testing fresh lows in the minor trend and threatening $58/bbl that makes the commodity-driven currencies also vulnerable.

Hence, we wish to activate WTI crude directional hedge, by adding shorts CME WTI futures for June delivery for arresting downside risks in short-run, simultaneously, go long in CME WTI futures of August’2019 month deliveries.

Currency Strength Index: FxWirePro's hourly EUR is at -94 (bearish), hourly USD is flashing at 106 (which is highly bullish), while articulating (at 12:59 GMT). 

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