$USO $WTICOUSD Oil Under Pressure
Updated
As the global economy continues to slow, and as global macro headline risks become more prevalent, oil has been the one asset that has felt the brunt of these developments.
After suffering its worst week on record, loosing over 6%, oil is experiencing quite a bit of bearish activity. On technical level, oil is trading below both its 10-Day and 50-Day EMAs for the first time this year, coupled with the fact that both EMAs are showing a "Death Cross" scenario on the daily chart. Furthermore, oil's MACD is below it Signal, indicating that the recent bearish activity has some legs to stand on.
We believe that this bearish activity will continue in the short-term, and see WTI's next stop at around $54.80 in the next few weeks time.
After suffering its worst week on record, loosing over 6%, oil is experiencing quite a bit of bearish activity. On technical level, oil is trading below both its 10-Day and 50-Day EMAs for the first time this year, coupled with the fact that both EMAs are showing a "Death Cross" scenario on the daily chart. Furthermore, oil's MACD is below it Signal, indicating that the recent bearish activity has some legs to stand on.
We believe that this bearish activity will continue in the short-term, and see WTI's next stop at around $54.80 in the next few weeks time.
Note
After another tumultuous week, WTI continues to be on the downtrend. So much so that it broke past our price estimate of $54.80 much faster than expected. To add more "salt in the wound", WTI metrics are looking even worse, with a Bear Engulfing, Long Black Candle and Gap Down patterns all occurring on May 30th.
We expect that his bearish activity will continue in WTI, with no end in sight. We estimate that its next stop is $48.14 over the next few weeks.
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