WTI Crude Oil Preparing for OPEC MeetingThe West Texas Intermediate Crude Oil market initially tried to rally during the trading session on Monday, bouncing from the uptrend line and reaching towards and above the 50-day SMA initially. The crude oil market kick off the week with rally, as an Iraq oil minister suggested that not only would OPEC continue its production cuts, but it would possibly even consider cutting an additional 400,000 barrels a day. The rally ran into a brick wall though as President Trump announced new tariffs in Latin America and threatened new ones on Europe.
At the end of the day Brent crude and WTI gave up their gains to finish almost unchanged. Now WTI crude oil is showing convergence with its hourly 20 SMA and trading below its 50 SMA on the same chart.
Near-term action is weighed by Friday’s massive bearish daily candle, with Friday’s close below 38.2% Fibo support at $55.78 (on last 2 months rise of $50.55 to $58.71) adding to negative near-term tone, which is expected to persist while recovery attempts remain capped by daily high ($58.15).
It is because of this that the $55 level underneath will offer plenty of support, but if it does in fact get broken, the market should goes down towards the $52.50 level (78.6% Fibo).
On the upside, the daily 200 SMA line remain relevant and are additional barriers against upward movement. The first resistance is at 56.50. Next is resistance from the 200-EMA at 57.51.
Overall, we believe that the market is going to continue the overall uptrend and channel for the rest of the week, but it will more than likely be very choppy, and news driven.
