Key Highlights
- Crude oil price started a major downside move from the $77.00 resistance against the US dollar.
- There are two bearish trend lines in place with resistance at $68.50 on the 4-hours chart of XTI/USD.
- The Euro Zone CPI in Oct 2018 (Preliminary) increased 2.2% (YoY), similar to the forecast.
- Today, the US ISM Manufacturing PMI for Oct 2018 will be released, which is forecasted to decline from 59.8 to 59.0.
Crude Oil Price Technical Analysis
After topping around the $76.80 and $77.00 levels, crude oil price started a major downside move against the US Dollar. The price traded below the $74.00 and $70.00 support levels to move into a bearish zone.
Looking at the 4-hours chart of XTI/USD, the price even broke the $68.80 support and settled below the 100 (red) simple moving average (4-hours). It opened the doors for more losses and the price recently traded close to the $65.00 level.
A low was formed at $65.32 and later the price started consolidating losses. An initial resistance is near the 23.6% Fib retracement level of the recent decline from the $72.42 high to $65.32 low.
More importantly, there are two bearish trend lines in place with resistance at $68.50. Besides, the 50% Fib retracement level of the recent decline from the $72.42 high to $65.32 low is around $68.80.
Therefore, if the price corrects higher from the current levels, it is likely to face a strong selling interest near the $67.80 and $68.80 resistance levels. On the downside, a break below the $65.00 support may perhaps push the price towards the $62.00 support.
Fundamentally, the ADP Employment Change for Oct 2018 was released by the Automatic Data Processing, Inc. The market was looking for a change of around 189K in Oct 2018.
However, the actual result was much better as the private sector employment increased by 227K jobs, more than the 189K forecast. It helped the US Dollar in gaining traction, resulting in increase in bearish pressure on pairs like EUR/USD and GBP/USD.
EUR/USD extended declines below the 1.1340 level and GBP/USD seems to be struggling to recover above the 1.2800 level.
Economic Releases to Watch Today
- BoE Interest Rate Decision – Forecast 0.75%, versus 0.75% previous.
- US ISM Manufacturing PMI for Oct 2018 – Forecast 59.0, versus 59.8 previous.
- US Initial Jobless Claims – Forecast 215K, versus 215K previous.
