Aayush Jindal
Key Highlights
- Crude oil price struggled two times to clear the$60.85 resistance against the US dollar.
- There was a break below a major bullish trendline at $58.70 on the 4-hours chart of XTI/USD.
- Canada’s CPI declined 0.2% in June 2019 (MoM),similar to the forecast.
- The US Initial Jobless Claims for the weekending July 13, 2019 might increase from 209K to 216K.
Crude Oil Price Technical Analysis
After forming a support base near $56.00, crude oil price climbed higher steadily above $58.00 against the US Dollar. The price even broke the $60.00 resistance area, but it struggled to climb above $60.85-60.90.
Looking at the 4-hours chart of XTI/USD, theprice made two attempts to climb further above $60.85. However, the bullsstruggled to gain momentum, resulting in a bearish reaction below $60.00.
The price formed a swing high $60.88 and recently declinedbelow a major bullish trend line at $58.70 on the same chart. Later, there wasa break below the $58.50 support plus the 100 (red) simple moving average(4-hours).
Moreover, the price declined below the 61.8% Fib retracementlevel of the upward move from the $55.92 low to $60.88 high. It seems like theprice has started a downside correction and it may continue to correct lower.
The main support on the downside is near the $56.00 leveland the 200 (green) simple moving average (4-hours). As long as the price isabove $56.00, it could bounce back and resume its upward move. If not, there isa risk of more downsides below $55.00 and $54.00.
Fundamentally, the Canadian Consumer Price Index (CPI) forJune 2019 was released by the Statistics Canada. The market was looking for a0.2% decline in the CPI, compared with the last increase of 0.4%.
The actual result was similar to the forecast, with adecline of 0.2% in the CPI. The yearly change posted a 2.0% increase, down fromthe last 2.4%. Looking at the BoC’s CPI report, there was no change in the CoreCPI in June 2019 (MoM), whereas the market was looking for a 0.1% increase.
The report by the Statistics Canada added:
Energy prices fell4.1% year over year in June,following a0.1% decrease in May. Consumers paid less for gasoline (-9.2%)and fuel oil and other fuels (-4.1%). This was due in part to falling oilprices amid rising fuel inventories in the United States and the elimination ofcarbon pricing in Alberta at the end of May.
Looking at major pairs, EUR/USD and GBP/USD are trading in bearish zone and they might find it difficult to correct higher in the short term.
Economic Releases to Watch Today
- UK Retail Sales for June 2019 (YoY) - Forecast +2.6%,versus +2.3% previous.
- UK Retail Sales for June 2019 (MoM) - Forecast-0.3%, versus -0.5% previous.
- US Initial Jobless Claims - Forecast 216K,versus 209K previous.
