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Fundamentals

During the Asian session on Wednesday (August 2), WTI crude oil fluctuated to downward and is currently trading around 81.8 dollars per barrel. Oil prices fell slightly yesterday, mainly due to the recent excessive oil price gains and the traces of profit-taking by bulls as they suffered from the strength of the US dollar. Oil prices have shown a clear bullish trend recently, but it is also overdraft the space above. Investors can keep an eye on tonight's inventory data. If the rise is weak and the price is under pressure, perhaps it is a good opportunity for short positions in the short term.

News: According to the results of relevant agencies’ surveys, the average OPEC oil production fell by 0.9 million b/d in July to 27.79 million b/d, which is the largest decline since 2020. Among them, Saudi Arabia fulfilled its commitment and cut production by an additional 1 million b/d, bringing the average output to 9.15 million b/d. It is said that Saudi Arabia is going to extend its voluntary production cuts until the end of September at Friday's OPEC+ meeting.

Data for investors to focus on today include US ADP employment change for July, as well as US EIA crude oil and gasoline inventories for the week ended July 28.

Technical Analysis

Trading at the daily timeframe, US crude oil fluctuated and fell to the 80.4 line under the pressure of the 82 line. Prices rose and rallied again at mid-night, testing the pressure of the 82.2 line at a high. The daily chart finally closed with another white body. Currently, US crude oil has closed with four consecutive gains, constantly consuming the impetus of the bulls. The trend has already entered the mid-term key resistance zone of 82.5-83.5 which is expected formerly, with the technical indicators showing a clear bearish divergence. Although the unilateral rise has not foreseen a top, it is wise for traders to maintain the previous bullish view without chasing an unsuitable long. If the oil price refuses to retreat, traders can hardly find a valid trading opportunity, despite the mid-term trend being bullish. Therefore, time is still needed to wait for the retracement before going long. At the moment, aggressive traders are able to test short in the short term, as the price is entering the target area at a high. The EIA crude oil inventory data will be released tonight. If the data is negative for crude oil, US oil may take the opportunity to fall back and adjust. At that time, investors can consider going short in the short term. If the data is positive for crude oil, then the upside of crude oil is still limited. Investors will not recommend taking long positions. In addition, investors can consider going short when the data is positive, with the price showing insufficient upward momentum and under pressure, or when it climbs up to the 83 line.

Aggressive investors can try to go short near 82.5 with a small position. The stop loss is 83 and the target below should focus on 80.4, where you can reduce positions partially and move your stop loss to break even. The remaining positions should target the MA10 at 79.4.

Trading Recommendations

Trading Direction: Short

Entry Price: 82.000

Target Price: 78.500

Stop Loss: 82.500

Support: 80.500/78.500

Resistance: 82.500/83.500