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Technical Analysis | Uncertainty reigning supreme in Crude oil prices

The recent Price action is quite uncertain for traders to digest. Fall in prices are coinciding with supply glut concerns and rallies are aligned with performance of dollar value. On September 2, US jobs report came in below the forecast, relatively Crude Oil prices rose 3% from $46.00 to $46.50 per barrel on International commodity markets. On MCX, price action bounced from 2900.00 to 3050.00. Contradictory fundamental factors such as Inventory levels, Production quantities, OPEC decisions and Dollar price value are affecting the performance of Crude Oil.

Technical Analysis of Crude Oil on 4h chart

Crude Oil Technical analysis | Uncertain Price action and Market sentiment

Price action is fluctuating on both sides; these paradoxical movements are becoming hard to trade for market participants. Upcoming OPEC informal meeting viewed with skeptical prism, traders are cautious about co-operation agreement between Russia and Saudi Arabia, the bloc’s largest producers of crude oil. Due to this reason, price behavior is indicating the existence of both buyers and sellers. Reasonably, reports about supply concerns such as inventory buildup, Production levels are causing selloff and weakness in dollar, delay in FED rate hike or any negative factors for US Dollar is creating rallies. Temporary price action is evidential of this thesis.

Uncertain Price Action and Market sentiment in Crude Oil

Analyzing higher time frame price action for Crude oil trading

Observing the Price action on daily chart, to reduce the volatile distractions helped to uncover some important clues. Though we see the existence of both buyers and sellers in lower time frame chart, we couldn’t spot any strong signs of buying pressure on daily chart of Crude oil. One thing for sure, Market sentiment is uncertain as prices are trading within some structural shift of long-term. It’s better to wait and watch the price action before establishing any positions. Weakness on either side might cause a strong impulsive movement. Traders should focus on Upcoming fundamental reports and Price action.

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