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Fundamentals

During the Asian session on Wednesday (October 18), WTI crude oil moves sharply upward and is currently trading near $87.1 per barrel. Oil prices had a deep V reversal yesterday, narrowly oscillating in the Asian session. With favorable retail data in the European and American markets, the dollar rebounded, and oil prices fell sharply. Finally, with crude oil inventories exceeding the expected de-stocking, the price rallied sharply again, at one point falling as low as 84.3, fully in line with our expectations. If you build positions for bulls in this location, you can also successfully cash in all the profits of 2.5 dollars. Today, we still want to emphasize that the Palestinian-Israeli conflict is a big disturbance to the price; the fluctuation will be very big, and the switch between bullish and bearish will be very fast. Therefore, do not chase the market. In the key resistance and support positions, you can continue to boldly try to trade with small positions and make a good small stop loss to maximize profits. During the day, you must not build positions in advance as well as stop losses at important support and resistance positions. It is recommended not to go long on the upper channel and not to go short on the lower channel.

News: U.S. President Joe Biden will make a visit to Israel on Wednesday after 2 unsuccessful visits by Blinken to Israel. Bombs leveled a hospital in Gaza on Tuesday and have killed at least hundreds of people. The U.N. says Israel also airstrikes a school in Gaza City, where at least 4,000 people have taken refuge.

Data: early morning API data showed that U.S. crude oil inventories fell by 4.383 million barrels, with an expected decline of 1.267 million barrels, and the previous value increased by 1.294 million barrels.

Key focus: EIA crude oil inventory data.

Technical Analysis

U.S. Crude rebounded sharply after oil prices came back yesterday and closed with bull candles. The price fell as low as 84.3 and rose as high as 86.4. At the moment, there is a lack of a clear unilateral driver for oil prices. However, due to the impact of uncertainty, the price is in a high volatility phase, which will increase the difficulty of investment. Especially with news dominated, the switch between bullish and bearish will be very fast, making the conversion of take-profit and stop-loss extremely fast. For the current market, the upper drive is still driven by the mood of the Israeli-Palestinian conflict. But the overall macro range of emotions is more depressed, which to a certain extent limits the upside space of oil prices; unless the situation is out of control, the technical side will appear to be more powerless at this time. For intraday trading, it is recommended to be patient. There are opportunities for both bulls and shorts, as wide-ranging oscillations dominate.

Trading strategy: It is recommended to buy low and sell high. If the oil price sharply retracement to 85.0, you can try to go long with small positions; you can set the stop loss at 84.5 and set the first target of take profit at 87.0, where you can reduce the position size and move the stop loss to breakeven; and you can set the second take profit target set at 88.0. If the oil price rises sharply to 88.3, you can try to go short with small positions; you can set the stop loss at 88.8 and set the first target of take profit at 86.3, where you can reduce the position size and move the stop loss to breakeven; and you can set the second take profit target set at 85.3.

Trading Recommendations

Trading direction: Short

Entry price: 88.300

Target price: 85.300

Stop loss: 88.800

Support: 86.400/85.000

Resistance: 87.700/89.500