Well, guys, I hope you enjoyed my previous Oil and EUR/USD forecast and made nice profits last week. Today I would like to explain you why oil price dropped. I know many traders are excited about it and Trump. But do you know why Trump needs lower oil price? It’s all just a political game.
Saudi Arabia has been the most powerful oil country in OPEC and in the oil market accordingly. Now they begin to lose its influence. Russia is getting more power, even despite the fact country is not even OPEC member. US oil output has increased significantly.
That reminds me Procter&Gamble story. The company offered extremely low prices. They had losses during few years, but they took control in the market and increased prices after that. This way most of their business competitors were just ‘killed’. I am not sure if Trump can get the same result. Saudi Arabia can say: “Oh, Mr. President, you want lower oil price? You will get it”. If Saudi Arabia continue to lose power in the oil market, they can just increase oil output and oil will hit $20 a barrel. USA and Russian oil production will be killed, while Saudi Arabia can survive. All because of cost of oil production. This is war and winner will control oil market in future.
By the way, oil was the reason of trade war with China. As they didn’t want to buy US oil – cost is the same, but quality of SA oil is much higher. So, as you see, it’s all about politics. And we have to watch fundamentals at the moment to understand what can happen to oil price in nearest future.
Not much technicals in oil market to discuss. So, more likely price will stay in the current range for some time. But we have other markets and I want you to pay attention to Gold. I think nice opportunity is coming. Watch 1264 range. If price gets rejected there, consider opening shorts with 1216 target. I think the channel will be broken down and my final target will be 1140. But once again, wait for price action confirmation and take this trade (nice risk/reward).
I have updated my wave count for EUR/USD. Last week I closed my shorts with good profits and on Friday went short again. My first target 1.12800. I will re-short at 1.13700 and hold till final target – 1.11200. After that I plan to stick to longs. Resistance – 1.14500 and it should hold to consider my count valid.
Wishing you a great week!
Sign up to our Newsletter
(We do not share your data with anybody, and only use it for its intended purpose)
No Representation Is Being Made That Any Account Will, Or Is Likely To Achieve Profits Or Losses Similar To Those Discussed Within This Site, Support And Texts. Our Forecasts and other Texts on this Website Should Be Used As Learning Aids. If You Decide To Invest Real Money, All Trading Decisions Are Your Own. The Risk Of Loss In Trading Commodities Can Be Substantial. You Should Therefore Carefully Consider Whether Such Trading Is Suitable For You In Light Of Your Financial Condition.
Futures trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Futures trading is not suitable for all investors.