It becomes more and more interesting.
For now, we have two scenarios: basic and alternative. I´m sorry for bears but I do not consider any bearish scenario for oil: the whole USD movement based on expectations from a rate hike on September was in vane: all FED speakers confirmed this in their most recent speeches. Friday´s NFP should put a logical end to all expectations on September´s hike.
Therefore, once USD starts moving down and DXY gets on its road to 88, we will have higher commodity prices.
As a consequence, the Basic Scenario is:
- Oil moves down to 44.15 area and prints a bullish run till 55 ish in the first half of September. Then we will have am ABC correction which should end around 43 ish and then the last climb toward 68-75 area before a big kraken arrives.
An alternative scenario is shown on a right-hand side:
- What we are currently living is a Wave 1 from 5, on a road to 68-75 area. Therefore, quote may decline to 43 or even to 42 and then we will have a massive bullish run which would stop around 60 ish. Some important correction will take place, back to 50-52 area, and then another run to 68-75.
I believe we may have an answer to which scenario becomes a reality by the end of this week: if we match or get below 43.49, the Basic scenario is invalidated as W4 cannot overlap W1. Therefore, we are in an alternarive scenario.
For bears: If oil goes below 39, you know what you have to do.
Charts below, as usual