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Crude Oil Price Recovers Sharply, Dollar Reverses Amid US Election Results

Aayush Jindal

Aayush Jindal

Key Highlights

  • Crude oil price started a sharp recovery above $35.00 and $38.00.
  • There was a break above a major bearish trend line with resistance near $37.70 on the 4-hours chart of XTI/USD.
  • EUR/USD and GBP/USD reversed their gains from well above 1.1700 and 1.3000 respectively.
  • The US ADP Employment (to be released today) could change 650K in Oct 2020, down from 749K.

 

Crude Oil Price Technical Analysis

This past month, there was a sharp decline in crude oil price from well above $40.00 against the US Dollar. The price broke many supports near $35.00 before it found support near $33.50.

Looking at the 4-hours chart of XTI/USD, the price started a strong recovery wave from the $33.51 low. There was a break above the $35.00 and $36.00 resistance levels.

The price gained pace above the 38.2% Fib retracement level of the recent decline from the $41.63 high to $33.51 low. There was also a break above a major bearish trend line with resistance near $37.70 on the same chart.

Finally, the price climbed above the 50% Fib retracement level of the recent decline from the $41.63 high to $33.51 low. The next major resistance is near $38.50, $39.20, the 100 simple moving average (4-hours, red), and the 200 simple moving average (4-hours, green).

A clear break above $38.50 and $39.20 could set the pace for a strong increase above $40.00. The next major resistance is near the $41.50 level. If there is no upside break above the 100 simple moving average (4-hours, red) could start a fresh decline.

An initial support is near the $37.20 and $37.00 levels. A downside break below the $37.00 level may perhaps lead the price back towards the $35.00 support.

Looking at EUR/USD and GBP/USD, there was a strong reversal from well above 1.1700 and 1.3000 respectively. It seems like the US dollar reversed losses across the board and even gold price declined sharply from $1,915. Keep an eye on US election 2020 live results, which is causing swing moves in the market.

Economic Releases to Watch Today

  • Germany’s Services PMI Oct 2020 - Forecast 48.9, versus 48.9 previous.
  • Euro Zone Services PMI Oct 2020 – Forecast 46.2, versus 46.2 previous.
  • UK Services PMI Oct 2020 – Forecast 52.3, versus 52.3 previous.
  • US ISM Services PMI Oct 2020 – Forecast 57.5, versus 57.8 previous.
  • US Services PMI Oct 2020 – Forecast 56.0, versus 56.0 previous.
  • US ADP Employment Change Oct 2020 - Forecast 650K, versus 749K previous.