WTI Crude oil it's lower on Tuesday and tests a very key level comprised of the 200 day simple moving average and the long-term level of significance at $77.40. Over the more medium term price action trades higher, within an ascending channel marking a series of higher highs and higher lows.
Should we see further bearish momentum from here oil prices may look to test the 50 day simple moving average down at the $73.84 mark before potentially making another test of channel support. Oil prices continue to react to global growth prospects which appear to have worsened given that the UK and Japan have already confirmed recessions. In addition, Europe's largest economy, Germany, is said to already be in recession according to the Bundesbank.
Oil- US Crude:Retail trader data shows 63.69% of traders are net-long with the ratio of traders long to short at 1.75 to 1.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggestsOil- US Crude prices may continue to fall.
Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Oil - US Crude trading bias.
