FxWirePro: WTI shooting star and bullish DMA crossover propels uncertainties but “double touch binaries” to fetch certain yields

On daily terms, shooting star is traced out at 54.22 levels to evidence the price slumps but not below DMAs, taking the supports at around 7 & 21DMAs it has bounced back again.

Most notably, since 7DMA has crossed over 21DMA which is deemed as bullish crossover we may expect the extension in ongoing rallies.

But you could also observe, the price behavior has remained in the range between 55.21 and 50.75 levels since mid-December 2016.

On monthly terms also, despite the struggle of breach above resistance of ascending triangle bulls are still lingering above EMAs.

Well, for now, interim dips can also not be disregarded as the stochastic nearing overbought territory and historically this leading indicator has shown the shrink in upside momentum at this juncture.

As a result, bulls seem to have exhausted at resistance at 54.31 to 55 levels, more price dips seems to be on cards if the bulls don’t manage to decisively break out and sustain above-mentioned range.

RSI at 58 and 59 levels is also sensing resistance; as a result, we foresee downswings may extend to retest support at around 53 or even up to 50.5467 levels. This leading oscillator (stochastic) on monthly terms has been indecisive in overbought zone.

On the contrary, MACD evidences bullish crossover that signals bullish targets in medium-long run, WTI crude price has been spiking higher through ascending triangle in consolidation phase (monthly chart) showing strength in rallies after the formation of dragonfly doji.

Oil prices plummeted on Wednesday on the back of concerns over speculation that producer club OPEC’s maintenance of its high compliance with output cuts aimed at reining in a global fuel supply overhang.

Trade tips:

Ahead of EIA’s inventory check during US session, we see speculative opportunities in double touch binary options of this energy commodity prices, this option trade is useful for intraday traders who believe the price of an underlying spot FX would undergo a large price movement, but who are unsure of the direction.

At spot ref: 54.25, a trader can use a double touch option with barriers at 54.58 and 53.6571, thereby, 100-115 pips are reasonable to speculate this pair on either side.

Some traders view this type of exotic option as being like a straddle position since the trader stands to benefit on a calculated price movement up or down in both scenarios.