Crude oil is cooling down

In my last update on Crude Oil titled Cost of living is going to creep up again....., I felt that while Crude Oil is climbing, it is range bound within a congestion band. Furthermore, the trade volume was thinning indicating weakness in its upward movement.

The rising cost of petroleum is more due to strengthening of USD against SGD, I estimated that there will be resistance at 1.36376 for SGD.

Fig 1. Light Crude Oil weekly chart

It seems that Crude Oil has recently broken through its congestion envelop with continuation downward.

It is presently locked in both resistance from 55 and 89-week moving average while supported by its 21 and 144-week moving average. At this point, I will consider its 55-week moving average to be most important, if it manage to break upward in the coming week, 

Its down trend comes with an increased in volume with MACD crossing downward.

The potential of further continuation is high base on the present read. Even so, I consider its 55-week moving average to be most important, if it manage to break upward in the coming week, it may reverse.

In its more major trend, there is support between 28.79 to 54.12. Its more immediate support to between 60.41 to 71.06.

What about the other factor, SGD?

Fig 2. SGD weekly chart

SGD is trickier, it reached the resistance level I have estimated earlier, which is also the 61.8% projection. While its drop was quite significant, it was supported by its 144-week moving average. it broke through this support this week, supported by its 55-week moving average.

One thing that I have also noticed here is a 3-wave pattern (upward) prior to its continuation down trend on 2nd October 2023. Its second up trend since 25th December 2023 also seem to be in a 3-wave formation. In addition, the latest descend has already violated the high on12th February 2024.

There is a mild divergence on MACD with higher high on chart comes with a lower high on MACD itself.  In addition, MACD is crossing downward. 

Presently, SGD reversed from its high of 15th April 2024, coincidentally a 61.8% projection of a major move and 100% projection of its minor move.

Couple with the alignment of the moving averages, the potential of down trend is relatively high.

Where are the supports for SGD?

Its more immediate support level between 1.3059 to 1.3293. If this is broken, the next support level will be 1.2873.

What if it breaks upward? Then the resistance upward will be 1.3875.