COAL PRICES WEEKLY TECHNICAL OUTLOOK: BEARISH
- Crude oil prices collapsed after a sharp denial of technical resistance and opened the door to re-test the August low.
- A Further Increase in Crude Oil Volatility May Suggest That Selling Pressure Could Last
- Find the Crude Crude Facts That Every Trader Should Know
Crude oil prices have been in turbulent trading over the past week dropped more than 1.5%. I noticed early last Tuesday that crude oil prices showed signs of weakness as volatility rose in the face of continued uncertainty over the US-China trade war over the impending Jackson Hole. Certainly the expectation has been met, as the bearish fundamentals were in line with a technical background that suggested the possibility of continued selling pressure.
ROHÖLPREISDIAGRAMM: DAILY TIME FRAMEWORK (20 DECEMBER 201
8 TO 23 AUGUST 2019)
Chart created by @RichDvorakFX with TradingView
The decline in crude oil prices Last week, the broad symmetric triangular pattern of the commodity that has emerged so far this year seems to be repeating and its price movement is contracting into a narrower wedge between higher lows and lower highs. However, the sharp rejection of the 57.00 price zone last Wednesday – a confluent resistance offered by the Fibonacci retracement level of 38.2% of the oil price rise of 55% from the December 2018 low, underlines the decline in the price of Crude oil. Crude oil prices, which fall below the mid-point of the aforementioned bullish trend, also underscore the dramatic selling pressure recently exerted on the commodity. This is happening in the midst of intensified Sino-US tensions while the trade war continues to rage.
The dwindling RSI also indicates a decline in the upside outlook for crude oil prices from a technical perspective, as the indicator fell back below 50 and is likely to continue its overarching trend since April. In addition, the struggle to regain the 50-day and 200-day averages could prevent a knockout attempt.
Crude Oil and Oil Volatility Index Pricing Table: Daily Timeframe (August 20, 2018 to August 23, 2019)
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For almost all risk-weighted assets, such as crude oil and equities, an increase in market volatility is usually inversely proportional to price developments. Crude oil volatility, as measured by the Cboe Oil Price Volatility Index (OVX), continues to rise. However, the recent surge in OVX – due to Chinese retaliatory tariffs and Trump's reaction to Twitter – may point to increased market uncertainty and risk aversion, indicating further weakness in upcoming crude oil prices.
CRUDE OIL PRICE TABLE: 4-HOUR TIME FRAMEWORK (29 JULY 2019 TO 23 AUGUST 2019)
Chart created by @RichDvorakFX with  TradingView
In In the scenario where markets are in turmoil with declining price movements moving to next week, crude oil could continue to crumble under the pressure of macro headwinds. The commodity trading range since the end of July has provided technical confluence levels around Fibonacci retracement levels of 38.2% and 23.6%, which can be explored for potential buoyant areas. While a $ 55.00 recovery may be in sight, the uptrend is likely to be short-lived as the price of crude oil declines sharply. Therefore, the path of least resistance for crude oil next week could be a retest of the previous low below the $ 51.00 price level.
– Posted by Rich Dvorak Junior Analyst for DailyFX.com
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