👋 Hello traders and investors! This is Itai Levitan from ForexLive.com, bringing you the latest technical analysis and trade ideas for Light Crude Oil Futures. Let’s dive into the current market setup and discuss potential strategies for your consideration.

Oil futures trend analysis 📈

We are observing an interesting pattern with Light Crude Oil. Recently, oil pierced a significant trend line, attempting a breakout but ultimately failing. This breakout attempt was aligned with the first upper standard deviation of the Volume Weighted Average Price (VWAP) anchored from the beginning of 2023. Given this failed breakout, it appears that the bears might have an upper hand at the moment.

Market response at 84 USD TO 85 USD 📉

Following the failed breakout, we have seen an initial decline of over 1%. This movement is critical as it sets the stage for a potential entry point.

Trade idea – short oil 🎯

Entry point

• Entry: $82.40

This entry point is very close to the current market price and provides a strategic position based on the recent technical behavior.

Stop loss

• Primary stop: $84.00
• Tighter stop option, see video above: $83.70

The primary stop is set just above the $84.00 level to protect against further upward movements. Traders preferring a tighter stop can opt for $83.70, which is still above the upper standard deviation but offers a more favorable risk-reward ratio.

Take profit targets

• First target: $80.26
• Second target: $78.16
• Third target: $76.80
• Fourth target: $72.85

These targets are strategically placed. The first target allows for partial profit-taking, reducing risk exposure as the trade progresses. Subsequent targets provide opportunities to capture additional profits as the market moves in our favor.

Risk-reward analysis

• Risk-Reward Ratio: Approximately 4.5:1

By averaging out the take profit targets, we achieve a balanced and favorable risk-reward ratio. This setup allows for substantial profit potential while managing risk effectively.

Trade tips 📝

1. Monitor lower time frames if you still want to enter but saw this late: It’s essential to keep an eye on lower time frames to refine your entry point and ensure optimal timing.
2. Partial profits: Taking partial profits at different targets is a professional approach to secure gains and manage risk.
3. Adjust stop loss: After reaching the first profit target, consider moving your stop loss to the entry point to protect your position and minimize potential losses.

Remember, this analysis and trade idea is an orientation for you to consider. Always trade at your own risk and perform due diligence before entering any positions. Stay tuned to ForexLive.com for additional insights and perspectives. Happy trading!

Thank you for reading, and good luck! 🍀

This article was written by Itai Levitan at www.forexlive.com.

• Need more certainty that inflation pressures have subsided sustainably
• Looking closely at labour market conditions and inflation indicators such as services inflation
• Recent wage data is consistent with the idea that „underlying“ unemployment rate has risen
• There are considerable second-round effects at play currently, will fade over the coming years

It’s good that his remarks are focusing on their goals and not sidetracked by the election. And it also speaks to which camp he is on I guess, since the June decision was supposedly „finely balanced“ even if the vote was 7-2.

This article was written by Justin Low at www.forexlive.com.

According to the EU’s Copernicus Climate Change Service (C3S), 2024 is on course to rank as the hottest year on record as climate change continues to push temperatures to record highs so far this year. They are pinning it as an approximately 95% probability that this year will beat the record set in 2023 last year.

If so, that will mean temperatures recorded globally this year will be the hottest since such records began in the mid-1800s.

C3S is out with the statement after last month ended up being the hottest June month on record.

Besides the obvious from climate change, El Nino hasn’t helped in relieving the world from the heat this year. The phenomenon is said to warm the surface waters of the eastern Pacific Ocean, leading to a rise in global average temperatures.

Global warming might not impact markets directly but as the above trend continues, it is worth taking notice. These sort of weather conditions do have an impact on certain commodities and in terms of demographics, it also impacts consumer behaviour to a certain extent.

It’s the simple things like:

• Should I go out (possibly spending more money) or should I stay in today?
• Should I invest in an air conditioner?
• Where should I go for a cooling and breezy holiday?
• The weather is so hot, maybe I should buy an iced tea to quench the thirst.. etc

This article was written by Justin Low at www.forexlive.com.

• The next truly open meeting is in September
• We are comfortable with the progress in disinflation, market pricing on rate cuts

It isn’t anything that we don’t already know. Knot also adds that the date in which they must meet the inflation target must not slip beyond 2025. Well, we’ll see. I mean, they have a knack of kicking the can down the road.

This article was written by Justin Low at www.forexlive.com.

The USD weakened across the
board last Friday following the soft US
NFP report. The data showed some more labour market cooling with an
increase in the unemployment rate and a decrease in wage growth. We basically
have an economy that is slowing but growing. We will see if the market will be
able to keep the positive sentiment on soft landing hopes or start to worry
about a recession. All eyes will now be on the US CPI and US Jobless Claims figures on Thursday.

The CAD, on the other hand,
gained last week against the US Dollar mainly because of the risk-on sentiment as
the US data continued to support at least two rate cuts from the Fed but didn’t
send recessionary signals. For the CAD, the next big event will be the CPI
report on July 16th. We saw another jump in wage growth in the
latest labour
market report, so the BoC will likely need good CPI figures to deliver a
rate cut in July.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD has recently dropped back to the bottom of the range at the key
1.36 support
zone where the price bounced off of last Friday.

The buyers will likely keep
on stepping in around these levels to position for a rally back into the 1.3785
resistance with a better risk to reward setup. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
new lows with the 1.35 handle as the first target.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price action remains rangebound between the 1.36 support and the
1.3785 resistance. There’s not much to do here and the market participants will
likely keep on “playing the range” until we get a breakout.

USDCAD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price broke out of the recent downward minor trendline that was defining the bearish
momentum before bouncing from the support. This could be a signal of a change
in momentum.

The buyers will want to see
the price breaking above the most recent lower high at 1.3643 to increase the
bullish bets into the 1.3785 resistance. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is a bit bare on the data front but nonetheless we will have some key
economic releases. Tomorrow, we have Fed Chair Powell testifying to Congress
and the markets will be focused on any view or hint about the monetary policy
trajectory after the recent NFP report. Thursday will be the most important day
of the week as we get the US CPI and the US Jobless Claims figures. Finally, on
Friday, we conclude the week with the US PPI and the University of Michigan
Consumer Sentiment survey.

This article was written by Giuseppe Dellamotta at www.forexlive.com.