Since the beginning of the year the commodity lost over 8.5% and last week ended with a loss of over 0.5% in addition crude oil made a phase change, shifting from an accumulation to a recovery phase.
Last week the crude oil went back and forward without any clear direction and closed in the middle of the weekly range, in addition managed to close within the previous week range, which being clearly neutral, neither side is showing control.
The narrow range, narrow spread weekly candle with high volume signals an anomaly signs that the upward momentum in the recent couple of weeks maybe in risk.
Stochastic is showing a strong bullish momentum and crossed above the 50 mid line.
Expecting an upward move to a weekly resistance at 53.66 on a break above the previous week high at 50.41 (scenario 1) however a break below from the previous week low at 48.35 may push the commodity back down to a Fibonacci retracement at 45.34 (scenario 2).
LCrude production advanced to the highest level in more than three decades and commodity price declines accelerated after the Federal Reserve (Fed) maintained its assurance to be “patient” on raising interest rates and boosted its assessment of the economy and labor market.
Yesterday the U.S. Energy Information Administration (EIA) released its latest survey. The report was expected to show a drop in LCrude stocks with estimates at 4.080 million barrels but the actual was worse than expected dropping only to 8.874 million barrels, triggering a sell-off.
LCrude is still in a strong bearish phase and fell during yesterday session closing near the low of the day. The commodity has fallen 17.53% since the start of the year but still holding the bottom at 44.18.
Expecting downward move to 42.58 on a break above below daily support at 44.18 (scenario 1) or a break above the daily support zone at 46.08 could push LCrude prices up to 50.0 (scenario 2).
LCrude is a CFD written over Light Crude futures.