XM Group - Analytics

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    Technical Analysis – US oil futures unable to hold above 50-day MA; bias is neutral

    US oil futures are attempting another rally on Wednesday after tumbling 8% on Tuesday. Prices met resistance around the 50-day moving average after struggling to rise much above it in the previous two days.

    Medium-term outlook remains bearish but the near term bias is looking mixed as RSI has tipped upwards above 50 after yesterday’s slide, indicating a small gain in momentum. However, the %K line of the stochastic oscillator has reversed and dipped back below overbought territory after a bearish crossover, though this potentially provides scope for another move upwards.

    The 50-day moving average remains the key resistance to overcome at 48.22. A rise above this level is needed to take prices into neutral territory. On the downside, the Kijun-sen line is providing immediate support at 43.81 but the key support to watch out for is the August 24 low of 37.74, which opens the way for fresh 6 ½ – year lows.

    Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.

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