(function() { var didInit = false; function initMunchkin() { if(didInit === false) { didInit = true; Munchkin.init('105-GAR-921'); } } var s = document.createElement('script'); s.type = 'text/javascript'; s.defer = true; s.src = '//munchkin.marketo.net/munchkin.js'; s.onreadystatechange = function() { if (this.readyState == 'complete' || this.readyState == 'loaded') { initMunchkin(); } }; s.onload = initMunchkin; document.getElementsByTagName('head')[0].appendChild(s); })();(function(h,o,t,j,a,r){ h.hj=h.hj||function(){(h.hj.q=h.hj.q||[]).push(arguments)}; h._hjSettings={hjid:1422437,hjsv:6}; a=o.getElementsByTagName('head')[0]; r=o.createElement('script');r.defer=1; r.src=t+h._hjSettings.hjid+j+h._hjSettings.hjsv; a.appendChild(r); })(window,document,'https://static.hotjar.com/c/hotjar-','.js?sv=');

Crude Oil Price Showing Signs of Fresh Decrease

Article background

Aayush Jindal

Key Highlights

  • Crude oil price faced resistance near $41.50 and declined below $40.00.
  • A major bearish trend line is forming with resistance near $40.80 on the 4-hours chart of XTI/USD.
  • The US Services PMI is likely to decline from 55.0 to 54.7 in Sep 2020 (Preliminary).
  • The US Manufacturing PMI could rise from 53.1 to 53.2 in Sep 2020 (Preliminary).

Crude Oil Price Technical Analysis

This past week, crude oil price started a strong increase above $38.50 and $40.00 against the US Dollar. However, the price struggled to continue above $41.50 and recently corrected lower.

Looking at the daily chart of XTI/USD, the price traded as high as $41.49 and it seems like the 200 simple moving average (4-hours, green) acted as a strong resistance. There was a bearish reaction below the $40.50 and $40.00 levels.

The price even spiked below the $39.50 level and the 100 simple moving average (4-hours, red). It tested the 50% Fib retracement level of the upward move from the $36.03 low to $41.49 high.

The first key support on the downside is near the $38.10 level (a multi-touch zone). It is close to the 61.8% Fib retracement level of the upward move from the $36.03 low to $41.49 high. If there is a downside break below the $38.10 and $38.00 levels, there are chances of more losses.

Conversely, the price might attempt another increase above $40.50. There is a major bearish trend line forming with resistance near $40.80 on the same chart. A successful break above the trend line resistance, the 200 SMA, and $41.50 is must for upside continuation.

Looking at EUR/USD, the pair extended its decline below the 1.1750 support level. Similarly, GBP/USD declined further and traded to a new monthly low below 1.2750.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI Sep 2020 (Preliminary) - Forecast 52.5, versus 52.2 previous.
  • Germany’s Services PMI Sep 2020 (Preliminary) - Forecast 52.9, versus 52.5 previous.
  • Euro Zone Manufacturing PMI Sep 2020 (Preliminary) – Forecast 51.9, versus 51.7 previous.
  • Euro Zone Services PMI Sep 2020 (Preliminary) – Forecast 50.5, versus 50.5 previous.
  • UK Manufacturing PMI Sep 2020 (Preliminary) – Forecast 54.3, versus 55.2 previous.
  • UK Services PMI Sep 2020 (Preliminary) – Forecast 56.0, versus 58.8 previous.
  • US Manufacturing PMI Sep 2020 (Preliminary) – Forecast 53.2, versus 53.1 previous.
  • US Services PMI Sep 2020 (Preliminary) – Forecast 54.7, versus 55.0 previous.
Great