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Wednesday, September 23, 2020

Technical forecasts for 3Q-2020 crude oil: focus potential in the foreground

PERSPECTIVES ON THE PRICE OF CRUDE OIL 3Q-2020: DIAGRAMS TO WATCH AMONG THE SECOND WAVE RISK

  • The technical outlook for crude oil was reduced to neutral and headed for the second half of the year with a broader bearish downward trend which undermined the recovery in the last quarter.
  • Oil prices have gone up about $ 75.00 since the first month futures contract hit a record high – $ 40.00 a barrel last April.
  • WTI crude oil price action could face upwind winds in 3Q-2020 as coronavirus pandemic persists and continues to catalyze market volatility

CThe technical outlook for the price of crude oil moved to a neutral level for the third quarter of 2020. A less optimistic forecast follows the upward trajectory of the commodity after staging an impressive rebound out of negative territory earlier this year.

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PRICE TABLE OF RAW OIL: DAILY TIME FRAME (DEC 2019 – JUNE 2020)

Graph created by @RichDvorakFX with TradingView

WTI crude oil prices have started to falter with commodities struggling to break through the $ 40.00 handle. This area of technical resistance stands out as a clear obstacle roughly supported by the lower early March gap, 78.6% Fibonacci retracement the trading interval from the beginning of the year and 200 days moving average also.

In the event that the selling pressure of crude oil accelerates in 3Q-2020, however, the positively tilted 50-day moving average, slightly above the price level of $ 25.00, may provide some degree of buoyancy. Oil price bears could push strongly towards technical support in the event of a break in the rising channel.

Oil forecasts

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Having said that, there is a strong potential for the ebb and flow of market sentiment to strengthen the direction of oil prices. Consequently, it is possible that the action of the price of WTI crude oil reflects the direction of the expected stock market volatility measured by the S&P 500 VIX.

— Written by Rich Dvorak, Analyst for DailyFX.com

Connected with @RichDvorakFX on Twitter for further information on the market in real time

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