Crude Oil Price Could Revisit $66.50, Upsides Remain Capped02 August, 2018 by Aayush Jindal in Market Analysis
- Crude oil price completed an upward recovery above the $70.50 level against the US dollar.
- There was a break below a crucial ascending channel support at $69.05 on the 4-hours chart of XTI/USD.
- The US ADP Employment change came in at 219K, more than the 185K forecast.
- The Federal Reserve kept the interest rates at 2%, in line with the market expectation.
Crude Oil Price Technical Analysis
After trading as low as $66.53, crude oil price recovered above $68.00 against the US Dollar. However, the price failed to break the $70.50 resistance and declined below $70.00.
Looking at the 4-hours chart of XTI/USD, the price recovered nicely above the $68.00 and $69.00 resistance levels. It also moved above the 38.2% Fib retracement level of the last decline from the $74.42 high to $66.53 low.
The price was trading in an ascending channel until it faced a strong resistance near $70.50-60 and the 50% Fib retracement level of the last decline from the $74.42 high to $66.53 low.
As a result, there was a downward move and the price broke the $70.00 and $69.00 supports. It also settled below the channel support at $69.05 and the 100 (red) simple moving average (4-hours).
If the recent break gains traction, the price is likely to revisit the last swing low at $66.50. On the upside, the broken support at $69.00 and the 100 SMA are likely to act as resistances.
Recently in the US, the ADP Employment Change figure for July 2018 was released by the Automatic Data Processing, Inc. The market was looking for a change of 185K, compared with the last 177K.
The actual result was better than the forecast as private sector employment increased by 219K jobs in July 2018. Moreover, the last reading was revised up from 177K to 181K.
Commenting on the same, the vice president and co-head of the ADP Research Institute, Ahu Yildirmaz, stated:
The labor market is on a roll with no signs of a slowdown in sight. Nearly every industry posted strong gains and small business hiring picked up.
Overall, the outcome was positive and it could continue to weigh on oil price as long as it is below $70.00.
Economic Releases to Watch Today
- US Initial Jobless Claims – Forecast 220K, versus 217K previous.
- US Factory Orders June 2018 (MoM) – Forecast +0.7%, versus +0.4% previous.
- BoE Interest Rate Decision – Forecast 0.75%, versus 0.50% previous.