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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Oil regains ground after holding key support

16:01 14 August 2018

Summary:

  • Oil moves up to highest level of the week

  • Long term support around $71 respected once more

  • Inventory data due in next 24 hours

 

There’s been further gains seen in the price of Oil today, with crude enjoying a nice bounce after falling lower around yesterday’s European close. The market has been under pressure since last week’s DOE inventory release which saw a large decline of more than 3% on the day. Last Wednesday the market was already moving lower but the inventory data and reports of Chinese sanctions on US oil exports saw the selling gather momentum with a high to low drop of around 300 ticks for the day.

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Oil has recovered the majority of the declines seen last week, with the market back above the 61.8% fib. Source: xStation

 

A large red candle around Monday’s European close saw the lows taken out but buyers managed to defend the $71 level which coincides roughly with longer term support. Looking at a daily chart the possible significance of this level is readily apparent, with the region previously acted as resistance at the start of the year, before offering support on several occasions since price broke decisively above it back in April. The market now appears to have respected the floor of its recent range at 71.00 once more and until we get a break out from either there or the ceiling around 80.50 then the range remains in tact.

Oil remains in a broader range from 71.00-80.54 after once more respecting the lower bound yesterday with a large wick below the D1 candle indicative of strong buying pressure. Source: xStation

 

Looking ahead there’s the private API inventory numbers due out later this evening before the more widely followed DOE release tomorrow at 3:30PM. As last week showed, these can have a significant impact on the market. Inventories remains pretty low compared to recent years and tomorrow’s DOE number is expected to show a further decline of 2.8M after recording a -1.4M print last time out. However, tonight’s API, while not as immediately market moving can often provide a better reference point than the consensus forecast published by Bloomberg in as far as showing what the market expectations are.          

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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