United States Oil (USO) Uncertainty prevails over how many countries will stop importing oil from Iran
Brent, the international benchmark for crude oil, could to rise above $85 per barrel in the coming months due to a combination of US sanctions on Iran and a potential Opec supply crunch, analysts say.
West Texas Intermediate (WTI), the American crude benchmark, could trade north of $80 per barrel, although it also faces supply-side risks due to the current annual US hurricane season.
On the whole, the scope, magnitude and broad-scale implications of the reimposition of Iranian sanctions on oil prices has not been fully priced into markets at the current juncture and the uncertainty surrounding the disruptions to Iranian oil supply will continue testing oil markets in the weeks ahead.
When markets closed on Friday, Brent was trading at $78.09 per barrel, down by 0.12 per cent whereas West Texas Intermediate was at $68.99 per barrel, up by 0.58 per cent with a difference of $9 per barrel between the two.
US President Donald Trump announced in May the reimposition of sanctions on Iran and asked all firms to stop dealing with the Islamic republic or face punitive measures starting from November.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 14.23.
The projected upper bound is: 15.15.
The projected lower bound is: 13.84.
The projected closing price is: 14.49.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum Indicators
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.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 56.7302. This is not an overbought or oversold reading. The last signal was a sell 8 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 53.55. 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 sell 52 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 -5. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.010 at 14.500. Volume was 18% below average (neutral) and Bollinger Bands were 23% narrower than normal.
Open High Low Close Volume___
14.480 14.710 14.310 14.500 16,358,244
Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 14.49 14.30 13.31
Volatility: 24 29 29
Volume: 14,398,599 19,284,736 19,284,392
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.
Summary
UNTD ST OIL FUND is currently 8.9% above its 200-period moving average and is in an upward trend. Volatility is low 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 13 periods.
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