Oil Prices Surge on Bullish Nonfarm Payrolls Data

Peterson

Commodity

Summary:

Today's oscillation range will be 81.5-83.3, and it is better to buy low and sell high.

BUY WTI

Close Time

CLOSED

81.497

Entry Price

83.300

81.000

67.259 +0.003 +0.00%

49.7

Pips

Loss

81.000

80.993

Exit Price

81.497

Entry Price

83.300

Fundamentals

During Monday's (July 8th) Asian session, WTI oscillated slightly, and it is now trading at 82.2.

Last Friday, crude oil hit a new phase high of 83.9 as the weak U.S. nonfarm payrolls data supported rate cut expectations, which boosted the oil price. Nevertheless, the demand improvement is only based on expectation, which is not realized at the moment. Especially, China's oil demand is declining, while China is the second largest country of oil consumption and the largest importer. Without a substantial improvement on the demand side, crude oil is unlikely to move up substantially. Therefore, we think crude oil is difficult to strengthen shortly until a retracement emerges to ease the short-term risk and overbought conditions.

Technical Analysis

In the 4H chart, a bearish piercing signal shows up, and the MACD line crosses below the signal line to form a death cross. Thus, there is space and momentum for crude oil to depreciate, and the first target should be the Bollinger lower band. Whether the price drops below it will determine the future trend. We should pay attention to the support at 82. If crude oil falls below this level, it may consolidate in the short term, and further support will be at 80. Now, the daily MACD cross has converged above the 0-axis, showing the weakening of momentum. Hence, investors should not blindly buy now as there is still downside space below.

Oil Prices Surge on Bullish Nonfarm Payrolls Data_1

Trading Recommendations

Trading direction: Long

Entry price: 81.50

Target price: 83.30

Stop loss: 81.00

Support: 82.00/80.00

Resistance: 83.80/84.50

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