Crude Oil Price Trading Near Make-or-Break Levels

Key Highlights

  • Crude oil price declined steadily and traded below $55.00 against the US dollar.
  • A key bearish trend line is forming with resistance near $55.40 on the 4-hours chart of XTI/USD.
  • The US ADP Employment changed 135K in Sep 2019, less than the 140K forecast.
  • The US ISM Non-Manufacturing Index could decline from 56.4 to 55.0 in Sep 2019.

Crude Oil Price Technical Analysis

After a downside break below $60.00, crude oil price declined steadily against the US Dollar. The price traded below the $56.00 and $55.00 support levels to trim this month’s gain.

Crude Oil Price Technical Analysis

Looking at the 4-hours chart of XTI/USD, the price filled the opening week gap of $54.80 and settled well below the 100 (red) simple moving average (4-hours). The price even traded below the $54.00 support and tested the key $52.20 support area.

It is currently consolidating losses above the $52.20 support. The main resistance is near the $54.50 level. It coincides with the 50% Fib retracement level of the recent decline from the $56.86 high to $52.25 low.

Moreover, there is a key bearish trend line forming with resistance near $55.00 on the same chart. Therefore, the price must settle above $55.00 to start a fresh increase. The next important resistance is near the $57.00 area and the 100 SMA.

Conversely, the $52.20 and $52.00 levels hold the key. If there is a downside break below $52.00, the price is likely to test the $50.50 or $50.00 support area.

Fundamentally, the US ADP Employment Change figure for Sep 2019 was released by the Automatic Data Processing, Inc. The market was looking for the employment to change by 140K, less than the last 195K

However, the actual result was less than the market forecast, as the private sector employment increased by 135,000 jobs from August to September 2019.

Overall, crude oil price might extend its decline below $52.00. Looking at major pairs, EUR/USD is struggling to recover above 1.0950, and GBP/USD is holding the 1.2200 support area.

Economic Releases to Watch Today

  • Germany’s Services PMI for Sep 2019 – Forecast 52.5, versus 52.5 previous.
  • Euro Zone Services PMI for Sep 2019 – Forecast 52.0, versus 52.0 previous.
  • UK Services PMI for v 2019 – Forecast 50.3, versus 50.6 previous.
  • US Services PMI for Sep 2019 – Forecast 50.9, versus 50.9 previous.
  • US Initial Jobless Claims – Forecast 215K, versus 213K previous.
  • US ISM Non-Manufacturing Index for Sep 2019 – Forecast 55.0, versus 56.4 previous.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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