Market update: Crude oil prices aim for best month since January 2022
Crude oil prices have rallied over 12 percent this month so far; maintaining gains would mean the best 20 days in 18 months and meanwhile, retail traders are becoming increasingly bearish.
WTI crude oil prices rose about 2.8 percent on Monday in what was the strongest 24-hour period since June 13th. So far this month, the commodity has soared an impressive 12%. If this push is sustained, we would be looking at the best 20-day period for WTI since January 2022, which was 18 months ago.
With that in mind, how is the technical landscape shaping up? The most prominent development overnight was that crude oil broke above the 200-day Moving Average (MA). WTI has not been above this line since August 2022. While a confirmatory upside close is absent, further upside from here could spell a meaningful turnaround for oil.
That said, for long-term upside progress, the 81.44 – 83.48 resistance zone is of utmost importance. If WTI fails to clear this zone in the event of further gains from here, it could maintain a range-bound bias, with the lower end around 63.60 – 65.72.
Guiding oil higher has been a near-term rising trendline from the end of June. In the event of a turn lower, this line could hold as key support. Otherwise, clearing under and dropping through the 74.68 – 76.28 inflection zone exposes the lower bound mentioned earlier.
Crude oil daily chart
Crude oil sentiment outlook - bullish
The IG Client Sentiment (IGCS) gauge shows that about 50.07% of retail traders are net-long crude oil. IGCS typically tends to function as a contrarian indicator. With that in mind, if positioning continues to become more bearish, this could underscore an upside technical bias for oil.
There is some evidence supporting this notion. Downside exposure has increased by 23.19% and 46.19% compared to yesterday and last week, respectively. With that in mind, recent changes in exposure hint that the current price trend may soon reverse higher.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
