Market Analysis: The Price of WTI Oil Falls to August Minimum

FXOpen

As the chart shows, US Crude Oil fell below USD 78 yesterday for the first time since July 25. This was facilitated by:

→ fears of a crisis that could follow from the collapse of the Chinese property developer Evergrande;
→ alarming PMI data from different economies. Japan reported a contraction in manufacturing activity for the third month in a row. Business activity in the euro area also fell more than expected, especially in Germany. Business activity in the US in August approached the point of stagnation, while growth was the weakest since February.

Bullish arguments:
→ The market has been bullish since July. And the current rollback from the top of July is just a correction.
→ The price of WTI Crude may find support from the lower border of the rising channel, as well as from the level of USD 78.50, from which the price has already formed bullish reversals in August.
→ The level of USD 74 looks like a reliable support.

Bearish arguments:
→ The USD 83 level has served as strong resistance throughout the year. This may be due to the fact that increasing the price above is not beneficial for governments and central banks that are fighting inflation.
→ A candle with a long upper shadow on August 21 (followed by 2 more bearish candles) indicates bearish activity.

Start trading commodities with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Commodities

Oil Analysis: Finally, A Bearish Reversal? Central Bank Week Shakes Up Gold Market Market Analysis: The Price of Oil Sets Maximum of the Year Market Analysis: Gold Price and Crude Oil Price Turn Green Market Analysis: The Price of Gold Rose by 3% in 10 Days

Latest articles

Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting

As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,

Commodities

Oil Analysis: Finally, A Bearish Reversal?

The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use

Commodities

Central Bank Week Shakes Up Gold Market

Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.