Crude Oil

Oil Price Starts Declining Phase Below $50 Vs US Dollar

  • Crude oil price after trading above the $50 handle against the US Dollar failed and started a downside move.
  • There was a break below two ascending channels with supports at $49.45 and $49.05 on the hourly chart.
  • Recently in the US, the Services Purchasing Managers Index (PMI) for July 2017 was released by Markit Economics.
  • The outcome was positive, as there was an increase from the last reading of 54.2 to 54.7.

Oil Price Technical Analysis

It was a good week for oil price as it moved above the $48 and $49 levels against the US Dollar. The price even broke the $50 handle and traded as high as $50.29.

Later, there was a downside move and the price started declining below $50.00. There was a break below two ascending channels with supports at $49.45 and $49.05 on the hourly chart.

There was a replicate of the channel patterns, sparking a downside move towards $48.25.

Oil Price Hourly Chart

Oil Price Technical Analysis

After trading as high as $49.82, a downside phase started and moved below the 50% Fib retracement level of the last wave from the $48.23 low to $49.82 high.

Soon, the price may test the last swing low of $48.20 and could even trade below it. If there is a break below $48.20, there could be a test of the 1.236 extension of the last wave from the $48.23 low to $49.82 high.

Overall, the price remains sell on rallies in the short term towards $49.20-50.

US Services PMI

Recently in the US, the Services Purchasing Managers Index (PMI) for July 2017 was released by Markit Economics. The market was expecting no change in the PMI from the last reading of 54.2.

However, the actual result was positive, as there was an increase from the last reading of 54.2 to 54.7. The most important point was the fact that the new business expanded at quickest rate for two years in July 2017. The report added that:

Increased business activity at service sector firms was supported by a further expansion in new business. July data indicated that the pace of new order growth was the strongest in two years.

Overall, there are chances of more declines in oil price below $49.00 in the near term.

About Aayush Jindal 109 Articles
With over 10 years of experience and still counting, Aayush posses great technical and fundamental analysis skills in the Forex, Cryptocurrency and Financial Markets. His Analysis are well-know and famous for engaging with viewers easily. He is from IT background with a lot of passion in the Forex and Cryptocurrency Arena.


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