Bullish Reversal Could See Oil Move To $54
Alexandros Yfantis | Nov 07, 2016 05:58AM ET
One thing you can’t accuse me of…I’m not a permabear or permabull. I’ve been oil bearish from $48 to $52 and back to $46-$45 area for the whole of October and now I see a really big upside potential for oil as the first reversal signals are here and price could explode to new highs around $54 and higher.
Oversold oscillators in the 4 hour chart turning upwards, price breaking out of the bearish channel, minimum bounce target is the kijun-sen (yellow line indicator) and next the Ichimoku cloud at $48. However if we look at the continuation chart on a daily basis we see that prices have reached important cloud support and with diverging oscillators, a new up trend could be starting now with targets above the recent highs.
Oil is clearly at support area and at least a bounce is justified. If on the way up we find more reasons to rise to new highs, why not? I think it is very probable to see oil above $54 again. The $43 level is also very important support and I would not like to see it broken. I‘m long mini crude futures and looking to add on any sign of strength.
At the same time the US Dollar Index is also showing reversal signals after a gap down and I believe an important top could already be in. A break below 1.3350 will confirm trend reversal and could also imply that the entire rise from 1.2450 could be complete.
USD/CAD has been forming a bearish wedge since March 2016 and I believe we could be close to breaking it to the downside. This has very bearish implications for the USD/CAD. Be warned…at least be cautious.
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