Crude oil price started a decent recovery after declining towards $44 against the US dollar during the start of May 2017.
There were back to back bullish candles on the daily chart (XTI/USD), taking the price above $48-50.
On the upside, the price faces major resistances starting from $53 up to $55.
Today, the US Gross Domestic Product preliminary reading for Q1 2017 will be released by the US Bureau of Economic Analysis, which is forecasted to increase by 0.9% (Annualized).
Crude Oil Price Technical Analysis
Crude oil price had a good bullish run this past couple of weeks, as it moved up from $43.55 to close well above $50 versus the US Dollar. Having said that, can buyers remain in control for this long?Looking at the daily chart of XTI/USD, there is a clear rejection near $44 for the recent upside move. However, there are many crucial resistances on the upside like $53.First, there is a major bearish trend line positioned at $53.30-10. Second, there is a clear cluster of hurdles at $54.20-54.80. It won’t be easy for buyers to break these resistances.So, even if the price moves further higher, we may see strong selling interest in the range of $53.00-54.80. As long as there is no daily close above $55, the price may form a short-term downtrend.
US Gross Domestic Product (GDP)
Today, the US will witness the release of the Gross Domestic Product preliminary reading for Q1 2017 by the US Bureau of Economic Analysis. The forecast is slated for an increase of 0.9% in the GDP, compared with the previous growth of +0.7%.If the actual result is in line with the forecast or exceeds the forecast, the US Dollar may gain traction, and crude oil price could slide back towards $48 in the near term.
US Initial Jobless Claims
Recently in the US, the Initial Jobless Claims figure in the week ending May 20, 2017 was released by the US Department of Labor. The forecast was slated for an increase from the last reading of 232K to 238K.The actual result was better, as the Initial Jobless Claims declined to 234K. However, the last reading was revised by 1K to 233K. The report mentioned that the “previous week's level was revised up by 1,000 from 232,000 to 233,000. The 4-week moving average was 235,250, a decrease of 5,750 from the previous week's revised average“.To sum it up, if the incoming releases in the US keeps registering positive data, commodity prices may be pressured in the short term.
Looking at the daily chart of XTI/USD, there is a clear rejection near $44 for the recent upside move. However, there are many crucial resistances on the upside like $53.First, there is a major bearish trend line positioned at $53.30-10. Second, there is a clear cluster of hurdles at $54.20-54.80. It won’t be easy for buyers to break these resistances.So, even if the price moves further higher, we may see strong selling interest in the range of $53.00-54.80. As long as there is no daily close above $55, the price may form a short-term downtrend.