Bottom line:  WTI Crude might have carved a major historic low at $0.01 per barrel in April 2020. Since then, the structure has remained constructive for bulls as they remain poised to target above $30 mark.

Fundamental Outlook:

WTI Crude prices remained subdued yesterday with over 2.5% drop and Brent closing lower by around 2%. The decision taken by the OPEC+ members on cutting production (by over 10 million barrels per day) effective May 2020, has had a positive effect, as WTI Crude has rallied from $10.27 to $27.95 per barrel between April 28 and May 06, 2020. The gradual opening of economies in the Europe and US has further added to the optimism in Global Demand.

DAX has managed to rally since the beginning of May until yesterday. The indice is trading close to 10784 levels as we write and it is expected to remain subdued for the next 2 trading sessions. Future price action in DAX would be taking cues from German and Euro zone GDP figures coming out on Friday, May 15, 2020. German GDP is expected to print -2%, while Euro zone at -3.3%, YoY.

Gold prices are struck in a range since $1747 highs in mid-April 2020. It has been in a contracting triangle consolidation and could continue for a while. Even the NFP report last week could not break the range $1740-$1660. Gold may gain as investors look for an alternate, with GDP forecasts for 2020 remain gloomy.

Technical Analysis:

WTI Crude still remain in control of bulls as price consolidate over the last few trading sessions after printing highs at $28.00 last week. Bulls might be preparing for another round of rally towards $30.00 levels to complete an impulse wave that had begun from $0.01 levels in April.

WTI Crude might have completed its drop from $65.62 levels since January 08, 2020. A historic low of $0.01 was registered on April 20, 2020 before the commodity managed to reverse higher. A push above $30.00 would complete its first impulse rally confirming further upside, going ahead.

Traders might be preparing to take profits on long positions around the $30.00 mark before WTI Crude corrects lower again. The drop would provide another opportunity to initiate long positions.

Prepared by

Harsh Japee, Technical Analyst.

WTI Crude Chart

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