Crude oil prices have turned modestly lower for Friday’s trading, narrowing any gains seen for the commodity earlier in the week. Prices have specifically stalled as traders are beginning to call into question the production cuts previously promised by OPEC nations. Oil prices have initially strengthened into 2017 on expectations of these productions cuts, so any data to the contrary may cause crude oil to decline further off of the standing yearly high at $55.21.
Technically crude oil remains in a long term uptrend, as the commodity continues to trade above its 200 day SMA (Simple Moving Average). This average now stands at $47.24, which continues to stand as long term support for the commodity. Traders should be mindful however, that crude prices are now trading back below the displayed 10 day EMA (exponential moving average) at $52.61. Typically this is a sign of short term weakness, and if crude stays below this point it may suggest a further slide in price starting next week.
It should also be noted that today’s intraday price action has crude oil set to end the trading week with the creation of an inside bar. If the commodity closes at present values, crude oil would have failed to create a new high or low for today’s session. This means breakout traders may use Thursday’s high and low as values of support and resistance to plan for the markets next breakout.
Bullish breakouts may begin for crude oil above Thursday’s high of $53.47. A breakout above this point would place crude back above the previously mentioned 10 day EMA, and open up the market to retest the standing yearly high. Alternatively, Thursday’s low of $52.10 remains a key value of price support. A bearish breakout here would suggest that crude is retracing more of its previous gains, and open up a test of the standing 2017 at $50.69.
(Created Using TradingView Charts)
— Written by Walker, Analyst for DailyFX.com