Crude Oil was on a bearish trend since March 2022, although the decline stopped and it was mostly consolidating during the first half of 2023. The 200
Crude Oil was on a bearish trend since March 2022, although the decline stopped and it was mostly consolidating during the first half of 2023. The 200 SMA (purple) turned into support on the weekly chart, with buyers jumping in around that moving average, despite a couple of piercings to the downside. In the last week of June though, crude Oil started a bullish trend as it climbed from around $67 where the 200 SMA stands, to $85 where the price met the 100 weekly SMA (green) last week.
The price formed a doji candlestick on this timeframe which is a bearish reversing signal and this week looks like it will close with a bearish candlestick. WTI Oil prices have experienced a drop of -3.5% for the week, potentially marking the worst week since early May and ending a 7-week winning streak. Retail traders, as reflected by IG Client Sentiment (IGCS), have become more bullish.
The indication of retail traders becoming more bullish while crude oil prices have experienced a decline suggests that there could be a sentiment shift in the market. However, it’s important to note that market dynamics are influenced by a wide range of factors, including supply and demand dynamics, geopolitical events, economic data, and more.
The unemployment report released on Thursday from the US was positive and it followed similarly upbeat economic data from the US earlier in the week, including retail sales, which suggested the FED may stick with higher rates for longer, even if they don’t raise rates again in September.
On the other hand, the economic data from China, which holds the position of the world’s second-largest Oil consumer, has drawn attention to a significant decline in economic momentum since Q2. The struggling Chinese economy has caused significant fluctuations in global financial markets over the past few months. One particular concern has been the property crisis that has unsettled investors, leading to fears of potential contagion effects.
This situation has contributed to uncertainty and volatility in financial markets worldwide. Chinese authorities are taking some measures, but they’re not enough, so the sentiment remains negative in financial markets. Now we can see a bearish reversal pattern on the weekly chart and if this unfolds in full, Oil can reach the support zone around $67 where the 200 SMA also stands. Commodity dollars are also suffering due to the negative risk sentiment, with AUD/USD closing
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