Crude oil, WTI, IG customer sentiment, technical analysis – opinions:
- WTI crude oil remains steady despite a bearish technical signal
- This is because the growing trend line from the end of 2021 is fast approaching
- Retailers have recently become bearish oildoes it portend good?
Technical analysis of crude oil
Oil prices remain in a fairly consolidated state. Last week, a candlestick model of the bearish Evening Star was formed, which offers a preliminary turn signal. However, the reverse passage is noticeably absent, which undermines the Evening Star. The immediate resistance is the zone 113.72 – 116.61, which was created in late March.
The recent consolidation means that WTI is approaching a key upward trend line from early December. The latter maintains a broader focus, with tests taking place in April and earlier this month. Hence, the trend line also closely coincides with the expansion of Fibonacci by 38.2% at 103.83.
Cleaning down will open a support zone of 92.95 – 95.11, but will not necessarily shift the wider horizon of the bear. Falling into this zone would mean a more neutral environment, a turn from the upward position since late last year. The fall could be that bearish shift, exposing the inflection point of 85.38. Otherwise the cleaning resistance puts the focus on the zone 124.76 – 129.41 above.
Chart created using TradingView
Analysis of attitudes towards crude oil is mixed
If you look at the IG Client Sentiment (IGCS), it is shown that about 43% of retail traders are net WTI debts. In fact, only recently have most traders turned into bears on the commodity. The IGCS tends to act as the opposite indicator, meaning it could portend energy prices in the future. At the moment, the upward position has increased by 7.23% compared to yesterday, and the risk of decline increased by 5.64% over the same period. The combination of current sentiment and recent changes gives an extra mixed bias.
The IGCS chart has been taken since May 23etc. Report
–– Author Daniil Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter