XTI/USD Technical Analysis | Forexlive
On the daily chart below, we can
see that the price has fallen back to the bottom of the range that’s been going
on for 3 months now. The market is divided between those that see demand
outstripping supply with China reopening and supply disruptions from
geopolitical conflicts, and those that see demand falling as a global recession
unfolds due to the central banks tightening.
We can see that the low was near
the $70 level as that was the price at which the US
said they will start to refill their Strategic Petroleum
Reserve (SPR). The levels are clear: get above 82.00 and the buyers will start
to target the 93.00 level, on the other hand, get below 72.00 and the sellers
will look for prices in the $60 region.
On the 4 hour chart below, we can
see more closely the rangebound price action. Recently, Russia has signalled
that it will cut oil production by 500k BPD in March and after some short-term
gain, the price couldn’t even get to the top of the range as worries on demand
are overshadowing the worries on supply.
The best strategy here is to wait
for a clear break on either side before taking positions. Otherwise, one can
“play the range” buying at support and selling at resistance with defined risk.
On the 1 hour chart below, we can
see that if the sellers want to be aggressive, then they can wait for a
pullback into the 75.35 level where we have the previous swing point and the
38.2% Fibonacci
retracement level.
This would be a trade in
anticipation of a breakout lower from the range and the subsequent fall towards
the $60 price area. If the buyers manage to break higher though, the trendline will be the last line of defence
before the buyers get even more conviction and start targeting the top of the
range again.