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Crude Oil: Falls on strong dollar and rising crude oil stocks

Yesterday the US dollar rose after the release of the latest FOMC Minutes, as they were perceived slightly less dovish and a June rate hike is still possible. A stronger dollar makes commodities denominated in US dollars expensive for holders of other currencies, typically decreasing demand for such raw materials.

The U.S Energy Information Administration (EIA) yesterday, released its latest survey. The report was expected to show a decrease in crude oil stocks with estimates at 3.429 million barrels but the actual was worse than expected rising to 10.949 million barrels.

Yesterday crude oil price fell more than 4.0% on an average volume and close near the low of the day but still managing to stay above the 10 and 50-day moving averages. The commodity is in a recovery phase and the stochastic is showing a overbought market.

Expecting upward move to a daily resistance at 53.92 on a bounce from a daily key level at 49.54 (scenario 1) or a break below a daily key level at 49.54 can push the commodity down to year lows at 46.08 (scenario 2).

LCrude is a CFD written over Light Crude futures.