Oil prices likely to fall further with imminent RSI sell signal

Discussion points on the price of oil

Crude is struggling to keep up with weakening demand outlooks, and recent price developments are increasing the risk of a larger downturn, the relative strength index (RSI) appearing to be about to blink.

Oil prices likely to fall further with imminent RSI sell signal

The updated report on the oil market of the International Energy Agency (IEA) warns against rising energy prices."less comfortable for consumers than at the beginning of the year, With the following group:mood will be influenced by the recent downturn in global GDP growth by the International Monetary Fund (IMF)'The United States and China, the two largest consumers of crude, are struggling to reach a trade deal.

The IEA goes on to say that "signals about the health of the global economy are mixed and diverging views on the likely level of oil prices"As Organization of Petroleum Exporting Countries (OPEC) and its allies are cutting back production and the group could continue to regulate the energy market in 2019 in the context of the ongoing expansion of production in the United States.

In addition to the 7029K increase in crude inventories, updates from the US Energy Information Administration (EIA) indicate that weekly field production is at a record 12,200KB / d during the week. ending on April 5th. In response, OPEC and its allies can continue their commitment to rebalance the energy market at the Joint Ministerial Follow-up Committee (JMMC) meeting scheduled for May 19, and the alliance could keep oil prices afloat in the coming months despite weakening demand outlooks.

In turn, current market conditions could keep crude oil afloat, especially as the price and Relative Strength Index (RSI) extend bullish formations from the end of 2018. N & # 39; Remember that the RSI, which is in overbought territory for this year, will see a classic sell signal appear over the next few days if the oscillator falls below 70. Sign up and join the DailyFX Forex Analyst, David Song LIVE for the occasion of discuss possible business configurations.

Daily chart CL1

• The advance of the Minimum 2018 ($ 42.36) appears to be depleted, with oil prices likely to be driven by a larger decline as a result of unsuccessful break / close attempts over the Fibonacci overlap, overlapping around $ 64.90 ( 100% expansion) at $ 65.90 (78.6% retracement).
• Will keep a close eye on the RSI as it is in overbought territory, but may see a manual sell signal emerge if the oscillator falls below 70, which could cause a backtrack to $ 59.70 ( 50% retracement). retracement zone).
• The next declining interest area is around 57.40 USD (61.8% retracement), followed by overlap from around 55.10 USD (61.8% increase) to 55 , 60 USD (61.8% retracement).

For further analysis, consult the 2nd quarter of 2019 Forecast for oil

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— Written by David Song, Currency Analyst

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