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Fundamentals

During the Asian session on Wednesday (June 28th), WTI crude oil narrowly oscillated, and it is currently trading near $68.1/bbl. Yesterday, U.S. crude oil dropped slightly downward due to the lifting of the Russian "mutiny" crisis as well as interest rate hike concerns. Overnight, ECB President Lagarde said that stubbornly high inflation will require the bank to avoid announcing an end to interest rate hikes. As the market expects the Fed to keep raising interest rates, the U.S. oil bears strengthened their actions, with the supply gap problem being temporarily ignored by the market. From a short-term perspective, it is difficult to make a judgment on the trend of U.S. oil without incremental clues. In addition, including interest rate hikes, every fundamental is not changed much. Now, a smooth market may be hard to emerge as oscillations dominate, but the space below has been extremely limited.

Significant data of today: the U.S. EIA crude oil inventory change for the week ending June 23rd, the U.S. EIA gasoline inventory change for the week ending June 23rd. Big events to watch: Bank of England Governor Balley, European Central Bank President Lagarde, Federal Reserve Chairman Powell and Bank of Japan Governor Kazuo Ueda participate in the European Parliament panel discussion, and U.S. President Joe Biden speaks on economic plans.

In general, the market focused on the overseas central bank's over-expected interest rate hike statement last week. Moreover, overlaid with the decline in manufacturing PMI in many countries, the recession expectations grew, and oil prices were weakly running. Meanwhile, the sudden emergence of Russia's civil unrest over the weekend has been quelled, but such an event has affected the stability of Russia's foreign energy supply and caused disturbance to oil prices in the short term. Currently, it is the peak season, summer, that consumes enormous amount of oil. Although the current market focus is on interest rate hike expectations, the macro pessimism will be repaired after June, the market risk appetite will be improved, and short-term valuation of oil prices may be revised upward. Thus, do not go short now to support the bears even losing partial profits below, otherwise investors will be trapped for a long time.

Technical Analysis

Daily chart: Yesterday, WTI fell from highs after hitting $70. Despite the rebound at the evening session after plunging to $67.7, WTI depreciated again from $69.3 to $67.6 under pressure, closing with a bear candle. Referring to yesterday's decline in U.S. crude oil, the market is still not confident. Regarding WTI, the SMAs fail to expand, MACD is also oscillating, indicating a weak continuation trend and a unclear short-term movement. Nonetheless, WTI has failed to break $67 for the fifth time, suggesting a solid and creditable support.

Today's trading recommendations: Try to buy lows today but not chasing the bears, and wait patiently for a sufficient decline. If WTI fall back again to $67.5, go long with small positions and set the stop-loss at $66. The initial target of taking profits will be $70.5 and the secondary target after the break-even order should be $72.5.

Trading Recommendations

Trading direction: Long

Entry price: 67.500

Target price: 70.500

Stop loss: 66.000

Support: 67.500/65.000

Resistance: 70.500/72.500