The Department of Energy inventory of crude oil came in more bearishly estimates analysts, growth of 2, 6 million barrels compared to the consensus estimate of a 1 million drop. The decline in implied demand than expected was also observed in the distillate and gasoline inventories, suggesting that demand forward for crude oil will be lower in the future. It is therefore not surprising that crude prices have pushed lower, reaching 103.0 at the end of the US session yesterday.
The decline yesterday may also be attributed to a large risk aversion that led stocks lower, giving oil another fundamental reason for the lower trade. However, it is difficult to ignore the technical side of things, as the decline yesterday actually began before the coming into play of the US session, and seems to be initiated by the failure to break key resistance 104.5 . It is also interesting to note that prices continue to climb over 103.0 bearish despite good reasons to drive down prices, especially since we actually reached 103.0 yesterday with less bearish patterns.
Time Table
Go ahead, if 103.0 continues to hold, the probability of a push 104.5 increases because it suggests that technical influence continues to reign. In addition, after suffering a huge drop in the past 5 days, would be reasonable to expect some kind of technical fallback to start. Stochastic readings agrees, with readings being heavily oversold. However, we only need to look at the last time was also oversold Stochastic to know that this is not necessarily a bullish reversal. The price actually traded lower on 20 September, despite mobile stochastic readings higher. This is perhaps what may need door today, where we have an extensive consolidation around 103.0 will provide space / rest for the bearish momentum still to reenter
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GBP / USD - Rebounds well off support at 1.60
AUD / USD - Continues to Drift Lower below 0.94
EUR / USD - strongly reverse back above 1.35
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