United States Oil (USO) traders will closely await updates on both the trade front and Fed policy
Oil futures ended higher Monday, with analysts tying support to the planned resumption of trade talks between the U.S. and China as well as expectations the Federal Reserve will deliver a rate cut when it concludes its policy meeting later this week.
West Texas Intermediate crude for September delivery CLU19, +0.51% on the New York Mercantile Exchange rose 67 cents, or 1.2%, to close at $56.87 a barrel, while October Brent crude BRNV19, +0.44%, the global benchmark, rose 15 cents, or 0.2%, to $63.62 a barrel on the ICE Europe exchange.
Oil has struggled to rally convincingly despite a string of six weekly declines in U.S. inventories and rising geopolitical tensions between Iran and other countries, notably the U.S. and Britain in the Strait of Hormuz, a key chokepoint for global oil transport, with around a third of global seaborne oil trade passing through the waterway. Washington’s decision last May to pull out of a 2015 Iran nuclear deal set the stage for increased animosities in the region. On Monday, the U.K. sent a warship to escort its vessels in the area and warned Tehran that it must release a British-flagged vessel seized this month.
Formal negotiations between China and the U.S., which were set to get under way on Tuesday in Shanghai, also were being watched for signs of progress, which could help support global economic expansion. Tensions between the superpowers have underpinned concerns about crude appetite.
President Donald Trump has suggested that Beijing may avoid inking a tariff agreement with the U.S. until it determines the outcome of the 2020 presidential election. “I think that China will probably say, ‘let’s wait,’” he told reporters in the Oval Office. “When I win, like almost immediately, they’re all going to sign deals.”
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead the Sino-American tariff talks.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 12.59.
The projected lower bound is: 11.00.
The projected closing price is: 11.79.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 black candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 47.1902. This is not an overbought or oversold reading. The last signal was a buy 5 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 49.14. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 31 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -39. This is not a topping or bottoming area. The last signal was a buy 5 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 8 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.170 at 11.820. Volume was 11% below average (neutral) and Bollinger Bands were 24% narrower than normal.
Open High Low Close Volume___
11.770 11.840 11.586 11.820 22,699,636
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.72 11.81 12.04
Volatility: 27 43 41
Volume: 26,656,182 28,287,224 27,656,876
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
UNTD ST OIL FUND is currently 1.8% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of USO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 23 periods.
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