Inside the Currency Market: WTI OIL

Current 45.91 Oil price is back trading between the 25 and 30 year averages at 47.56 – 42.87. Above 47.56 targets next averages 48.91, 52.67, 54.48 and 56.49. Further out averages include 64.57, 65.75 and 77.89. Below 42.87, targets 31.97 and 27.26,

Above, 3 giant Median lines are descending on current prices at 88.80, 93.53 and 94.32. As oil prices range or drop then Median lines assist to push down all averages from 1 – 30 years. All averages are below Medians. All averages are dropping and lost about 20 points since Oil collapsed. The days of $100 oil are gone as any price rises are correction in a large downtrend.

What drives prices are averages 3, 5, 7 and 10 year as those averages remain slow movers in relation to current prices. The 5 year at 87.92 is most oversold followed by the 3 year ( 83.78), then 7 ( 81.99 ) and 10 year at 81.23. The 42 – 47 range held because price drops leaves the 5 year oversold. It will take time for the 5 year average to drop further. The 5, 7 and 10 year however reveal significant Peaks followed by the 1 year at 56.49. The larger picture reveals oil direction and price is heading lower.

To align the distribution from 1 – 30, targets must be seen at 14.25, 23.12, 27.26, 37.58, 44.53, 54.70, 60.99, 62.75, 62.89, 70.17.

Oil is a risk on asset and correlates with EUR/USD from 1 – 7 year averages as follows: 0.48, 48%, 83%, 94%, 96% and 77%. Oil negatively Correlates with USD/CAD from 1 – 5 year averages as follows: -86%, -93%, -86%, and – 82%. The view is the overall picture. On a day to day basis, changes can and will occur and happened this week as EUR/USD and USD/CAD averages from 5 – 20 day revealed juxtaposed Correlations.

Oil is again in a range and its a range trade until 42 or 47 breaks.

Brian Twomey, Inside the Currency Market, btwomey.com

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