US crude climbed today after the inventory data from the American Petroleum suggest that crude implicit demand grew again, with the API report showing a decline of 5.7 million barrels last week compared to the consensus estimate of analysts down 2.8 millions. Currently, prices have climbed since to a high of 98.7, pushing the downward pressure came from lower than the Chinese manufacturing PMI expected number who have managed to push lower Asian stock prices. This suggests that the bullish momentum is strong, and we should see a more optimistic extension in the European and US trading sessions today if all things remain the same (eg, no surprises bearish ads that may influence 'risk appetite).
timetable
However, it should be noted that for all its worth, the current upward force pales in comparison to the huge decline earlier this week. We are still a far distance the round figure of 99.0 resistance, yet the momentum indicated by Stochastic suggest that we are already overbought. Without breaking 99.0, it is difficult to imagine current thrust as anything beyond a short-term correction, and this statement is correct because the prices have actually started shooting before the numbers of API have been released, and the upward reaction during the initial withdrawal was much stronger compared to the post-reaction API, lending credence to the claim that the current movement may simply be a correction rather than an upward thrust fresh.
If the above is correct, then the probability of 99.0 outfit becomes higher, which would also imply that the decline that began earlier this week remains in play, and there the risk that prices may even go lower from here without testing 99.0.
Weekly Chart
long-term chart is mixed. On the one hand, one can construct a bullish outlook based on low bounce Channel in conjunction with stochastic readings amidst a rising cycle. If this interpretation is correct, a movement up or at least Canal near 110.0 based on current levels Stoch is possible. However, things are not so clear, with 100-102 how resistance band. This will not necessarily mean that the price will not be able to push much higher in the long run, but now it is difficult to make a bullish long term narrative.China and India, two of the largest manufacturing economies remain weak . Global consumption of crude to fall, and this has forced OPEC to slow production back at the end of 2013. In addition, production from the United States has been steadily increasing for economic and political reasons . As such, it is difficult to imagine being able to gross up much further from here.
Take a step back, it is clear that the reason why the price of WTI rallied in the month of December has to do largely to the decline in crude stock, breaking the consecutive 10 weeks Chain accumulation of stocks. This decrease can not be said too surprising that December's seasonal pattern for inventory to go lower (lower production and higher consumption). The only real surprise was the extent that inventory has decreased, but this could simply be interpreted as a temporary setback following the 10 weeks prodigious race earlier. Therefore, traders who believe that the situation of excess supply / demand sub-reversed may wish to retain some weeks to confirm this belief. From a technical point of view, it is likely that the price should have either broken the 100 - 102 resistance band or lower back here in a few weeks, so we would also like to have the technical confirmation of the direction of prices - perfect recipe for strong directional thrust forward
links :.
GBP Technicals / USD - Biggest Gainer In H2 2013 Leading 2014 load
AUD / USD Technical - Bears Early disperse on China PMI
EUR / Techniques USD - Bear Claiming First Blood In 2014
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