US West Texas intermediate crude oil futures are trading sharply lower on Monday, higher for the seventh straight week on Friday.
Headlines are telling us that oil prices are slipping in early trade as concerns over a rapidly spreading new coronovirus in the United Kingdom raise concerns that the global economy may improve and reduce its need there and in other European countries, however, the strong US dollar is reducing foreign demand for dollar-assets.
The greenback has been climbing against a basket of major currencies since early Monday as investors sought its relative safety as many countries tightened the COVID-19 lockdown.
Daily Swing Chart Technical Forecast
Today’s trading should be about the downside. Some will blame the possibility of a new ban on weakness, others will blame the strong US dollar. Still others will say that we are seeing profit-making and situation-improvement before the holiday-shortened week.
With hedge funds over an extremely long period of time, I would like to issue a warning that if the funds decide to liquidate at the same time it can turn into a slump. This is possible because they follow the “herd theory”. When someone starts selling, they start selling to everyone.
A steady decline would target the Fibonacci level at 3227. We may see a technical boom in the first test at this level, but if it fails then look for a sale to expand to the nearest main floor, possibly at 3380. If sellers remove this level, the trend will shift downward.