Crude Oil Price Turned Bearish Below $66.00?

Key Highlights

  • Crude oil price started a fresh downside move and declined below the $66.00 support against the US dollar.
  • There is a major bearish trend line in place with resistance at $65.90 on the 4-hours chart of XTI/USD.
  • The US Services Purchasing Managers Index (PMI) in May 2018 increased to 56.8 from 55.7.
  • Today in the US, the Trade Balance figure for April 2018 will be released, which is forecasted to post a deficit of $-49.0B.

Crude Oil Price Technical Analysis

After a nice upside move, crude oil price topped around the $73.00 level against the US Dollar. The price started a major bearish wave and tumbled below the $70.00 and $68.00 support levels.

Crude Oil Price Technical Analysis

Looking at the 4-hours chart of XTI/USD, the price moved into a bearish zone with a break and close below the $66.00 support. It also settled below the 100 (red) and 200 (green) simple moving averages (4-hours).

It seems like there could be more declines in the near term towards the $62.50 and $61.00 levels. On the upside, there is a major bearish trend line in place with resistance at $65.90 on the 4-hours chart of XTI/USD.

As long as the price is below the trend line and the $66.00 pivot level, it remains in a downtrend. Above $66.00, the next barrier for buyers are at $67.50 and $68.00.

Recently in the US, the Services PMI for May 2018 was released by Markit Economics. The market was looking for no change in the PMI from the last reading of 55.7.

However, the actual result better than the forecast as there was a rise in the PMI to 56.8, which means output growth was strongest in over three years. Commenting on the same, Chief Business Economist at IHS Markit, Chris Williamson, stated:

The US economy kicked up a gear in May. A markedly improved service sector performance takes the final composite PMI reading above the flash estimate and to its highest for over three years.

Overall, the US Dollar remained in control versus other majors such as the Euro and the British Pound. Oil and gold prices may also come under bearish pressure in the short term.

Economic Releases to Watch Today

  • US Trade Balance April 2018 – Forecast $-49.0B, versus $-49.0B previous.
  • Canada’s Ivey PMI May 2018 – Forecast 69.7, versus 71.5 previous.
  • Canada’s Building Permits April 2018 (MoM) – Forecast +2.0%, versus +3.1% 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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