Daily Analysis: Eyeing OIL for an interesting buy opportunity

OIL recently dropped heavily, and currently trading around the last low, as can be seen on the daily chart below. There is a strong bullish hidden divergence on the daily chart. If the OIL manages to hold the last low, then we may witness one more push up. So, I think we should be looking for buy opportunities.

If we look at the 4 hour chart, then we can see that the last gap is closed now, and there is twenty candles ride to the downside as well. The RSI is around the extreme levels, and we also have a bullish divergence on the 4 hour chart. So, in order to enter into a trade we will wait for a small push higher, then a drop again to test the lows as highlighted below in order to jump into a trade. Remember, the risk-reward for this trade is high, but we will trade with caution and with small size.

Another way to enter into a trade will be after the double break on the hourly chart. There is a trend line and resistance at around the 93.30 level, as shown below. If the price jumps higher and closes above the trend line and resistance, then we can enter into a trade.

Initial target could be around the 96 level, and final target could be around the 98 level. Stop should be placed below the last low.

Reviewing yesterday’s events and trades
Yesterday, the US ADP Nonfarm payroll data was released, which registered an impressive gain. The market was expecting a fall to 200K, but the reading came as a surprise as it jumped to 238K, and the previous reading was also revised up from 215K to 229K. The US dollar was seen gaining some ground, especially against the Australian and the New Zealand dollar. Later, the FOMC meeting minutes were released, which again boosted the US dollar, as the Fed released a hawkish statement compared to the last statement.

Fundamental Outlook for the day
Today is an important day as Bank of England (BOE) and European Central Bank (ECB) interest rate decisions is scheduled later in the day. BOE is expected to keep the interest rates at 0.5% with no change in asset purchases. ECB is also likely to keep the interest rates unchanged at 0.25%, but focus would be on ECB President Draghi’s speech. Investors would be watching his speech closely in order to know more about the possibility of easing from the ECB, which can cause volatility in the market. The EURUSD is trading around the crucial levels, so we need to watch carefully for a breakout.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURJPY, EURAUD, EURCHF, EURGBP, GBPUSD, USDCAD, AUDUSD and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast

Trade carefully friends. Happy trading!

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