Oil prices turn south as recession fears dominates.
“Traders remain fixated on recent negative events and data which may spark global recession.”
Global oil price fell to multi-months low as recession worries bloom. Yesterday, People’s Bank of China cut interest rates unexpectedly as the world’s largest economy reported bleak results from industrial output and retail sales. The move also came as the country continues to impose “zero-covid policy” by imposing strict social distancing rules and lockdowns when coronavirus case rises. Slowing economic trend in China have dialed down optimism towards crude oil as the country remains as world’s largest oil importer.
Quick recap on USOIL
USOIL remains traded in a downward fashion following prior failure to close above the 200-MA line.
USOIL Weekly Technical Analysis
From weekly perspective, MACD illustrates increasing bearish momentum, signaling possible downside ahead.
USOIL Daily Technical Analysis
From daily perspective, the commodity is approaching minor support at 84.57, the key level for further downside thereafter.
Trading Idea
ORDER: SELL STOP
ENTRY: 82.55
STOP LOSS: 85.95
Target 1: 78.75
Target 2: 75.35
ZFX Analyst’s Comment
USOIL failure to extend its recovery past 200-MA line signifies persistent selling pressure from the upside. Thus, we would expect the commodity to extend its losses after closing below its nearest support level.
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