Crude oil is set close a bullish trading week. Crude began this week's session at about $83.00 a barrel and is currently trading near $88.00 a barrel. However, both the 4-hour and the 8-hour charts are providing solid i ndications that a bearish correction is impending. A bearish cross has been completed on the Slow Stochastic of both charts - above the 80 line - which usually detects overbought conditions in the market. In addition, the RSI on both charts is pointing down. If the RSI will drop below the 70-line, it would further support the bearish prediction.
- Non Farm Payrolls - Beware
Despite the technical predictions, traders should also take into account that today at 13:30 GMT the U.S. Non-Farm Payrolls release is scheduled. This is one of the most significant news events of the month, and usually causes unusual volatility. The repercussions are extremely difficult to predict, and the risk of keeping an open position at this time is high. Analysts are forecasting that payrolls have increased by 143,000 in November. Conventional wisdom suggests that if the actual figure will be higher, crude oil prices will rise. If the end result will be negative, crude might face a sharp bearish correction.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.