Indicator Signals Give Mixed Information and Both Bulls and Bears Have Opportunities

Summary:

Oil prices are entering wait-and-see mode ahead of Fed Powell's speech at Jackson Hole as everyone expects a major move in the dollar after Powell's speech.

BUY WTI

Close Time

CLOSED

91.095

Entry Price

97.000

89.000

90.856 +2.608 +2.96%

525.3

Pips

Profit

89.000

96.348

Exit Price

91.095

Entry Price

97.000

Fundamentals

WTI crude continued to trade lower on Friday after a volatile start as Fed officials dropped hawkish hints on economic policy ahead of the Jackson Hole symposium. As of press time, the price of WTI crude oil fell by more than 1% on the day, to below $93 per barrel.

The ongoing Jackson Hole Symposium and its impact on overall market sentiment could be the main catalyst for commodity prices in the coming sessions. After all, central bankers such as Fed Chair Powell can share more insights on their monetary policy plans, which in turn can influence interest rate expectations.

Meanwhile, crude oil prices continued to find support amid multiple signs of market tightness. Earlier this week, U.S. crude inventories fell for a second week in a row as the country exported the most crude oil and refined products ever.

In addition, crude oil prices appeared to be supported by OPEC+ proposals to cut production targets to keep prices stable. Expectations of lower demand due to slowing economic activity in major economies could lead to oversupply if Qatar does not adjust.

The Saudis also suggested that OPEC+ could intervene by curbing output if market fundamentals and futures markets continue to diverge. OPEC+ members have backed Saudi proposals for market intervention, while export concerns from Kazakhstan have brought supply concerns to the forefront. These developments boosted trading activity, with benchmark international futures trading above 1 million contracts for the first time since mid-July.

WTI: Indicator Signals Give Mixed Information and Both Bulls and Bears Have Opportunities _1

Technical Analysis

WTI crude traded sideways in the short term and tested upside resistance near the $95 level. The price is currently pulling back from the top of the range and it is likely to hit the bottom again.

However, the 100 SMA is above the 200 SMA, so the path of least resistance is to the upside. Crude oil prices are testing dynamic support at the 100 SMA and could rally to the top of the range to try to break higher.

In addition, the stochastic indicator has pulled higher without reaching the oversold territory, indicating that the bulls are eager to return. The indicator still has plenty of room to rise before the exhaustion among crude bulls. Likewise, the RSI is pulling higher but not indicating oversold conditions, which also suggests that the bulls are ready to take over. In the event of a bullish breakout, crude could rally to the same heights as the range. There are opportunities for both long and short positions.

Trading Recommendations

Trading Direction: Long

Entry Price: 91.50

Target Price: 97.00

Stop Loss: 89.00

Valid until 2022-09-09 20:00:00

Support: 91.00

Resistance: 94.00

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