Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
You can access all of our platforms from a single Saxo account.
Technical Update - WTI and Brent Crude oil finding floor. Natural gas range bound after rejection
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: WTI and Brent Crude oil have been hit with heavy selling of late pushing the black gold through several support levels. But now Crude oil seems like it is finding its floor trying to form bottom and reversal patterns
Dutch and Henry Hub Natural gas range bound after being rejected at key resistance levels
WTI Crude oil took out key support at around 77.21. Next support at around 73.84. However, WTI could be in the process of forming an Evening star like pattern. It is not the best textbook example though, but could still be an indication of a bottom and reversal. For that scenario to play out minimum requirement is for WTI to close higher today.
If WTI is performing a daily close (not necessarily today) back above 78.50 the rebound could extend to 83-84 level
However, RSI is still in negative sentiment with no divergence suggesting lower levels could be seen, and a dip down to 73.84 should not be ruled out.
If WTI is closing below 73.84 no support until around USD67/barrel level
One could argue WTI has formed a Shoulder-Head-Shoulder like pattern. Ideally both shoulders should be of almost equal height so it is merely a Quasimodo SHS – with two heads!
Nevertheless, WTI has reached 0.618 Fibonacci of the Head to Neckline level at 75.23 which could be the exhaustive downwards move short-term
Medium-term If WTI is closing the week below 77.59 downtrend is confirmed and we could see WTI drop lower to test the falling trend line and to around the 200 weekly Moving Average level i.e., around USD70, possibly lower
Brent Crude oil support at around 78.34. If closing below 78.34 there is no strong support until the lows back in May-June around 72.
Medium-term Brent is in a downtrend that would be further confirmed if Brent is closing below 81.94 on the week
The 0.786 retracement of the entire Q3 bullish move at 77.16 is likely to offer support
Dutch TTF Gas seems range bound between 44.80 and 56.10. Break out is needed for direction. A close below 44.80 Dutch gas is very likely to test the lower rising trendline and the 100 and 200 daily Moving Averages.
A close above 56.10 there is upside potential to 78 Henry Hub Gas. Rejected twice at strong resistance at around 3.63. Henry Hub hovering around the 0.786 retracement the Natural Gas future could find support at the rising 55 Moving Average.
The uptrend is still intact but a close below 2.835 will reverse it. A close below 2.835 a collapse to around 2.50 is likely
The uptrend is still intact but a close below 2.835 will reverse it. A close below 2.835 a collapse to around 2.50 is likely
Latest Market Insights
Quarterly Outlook 2024 Q3
Sandcastle economics
-
-
Bonds: What to do until inflation stabilises
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
-
Equities: Are we blowing bubbles again
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.
-
FX: Risk-on currencies to surge against havens
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
-
Commodities: Energy and grains in focus as metals pause
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.