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Commodity
by FXOpen on May 29th, 2019

Crude oil price outlook: there is a risk of a downside break below the $58.50 support

Oil prices on Wednesday fell by about 1% due to the fears that China-US trade war could trigger a global economic downturn, but relatively limited supply amid falling OPEC production and political tensions in the Middle East offered some support.

The prices were bolstered by reduced supplies led by the Organization of Petroleum Exporting Countries (OPEC) from the beginning of the year and political tensions in the Middle East.

OPEC and some allies, including Russia, are due to meet on June 25 and 26 to discuss exit policies.

Meanwhile, speculators once again reduced their net long positions in U.S. Crude futures and options last week.

Oil price technical analysis

Crude oil price recently recovered from the $57.50 support area against the US Dollar. The price climbed above the $58.50 and $59.00 resistance levels, but it struggled to clear the $59.50 zone.

chart

A swing high was formed near the $59.55 level and the price recently declined below the $59.00 and $58.90 support levels. There was a break below a major bullish trend line with support at $58.85 on the hourly chart.

The price is now trading well below $59.00 and the 50 hourly simple moving average. Therefore, there is a risk of a downside break below the $58.50 support level in the near term.

Conversely, if there are is an upside correction, the recent supports near $58.85 and $59.00 are likely to act as a strong barrier. Only a close above $59.00 and the 50 hourly SMA could start another upward move towards $59.50.

By FXOpen

FXOpen is a Forex and Cryptocurrency broker founded in 2005 by a group of traders. With over 10 years of experience, the company has established itself as a major Forex broker that continues to expand rapidly across the globe. FXOpen offers the MT4 and MT5 Forex trading platform with a wide range of trading instruments including 100+ FX, CFDs, Indices and Cryptocurrency markets. FXOpen also provides its own PAMM technology allowing clients to benefit from the strategies of professional traders with a proven track record of successful trading. The FXOpen Group also includes the ASIC regulated FXOpen AU in Perth Australia and the London-based FXOpen UK that is regulated by the FCA.

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