Commodity markets have surged and so has crude oil – we have pushed up to major monthly resistance but we are overbought and we see going short on weakness as a good risk to reward trade.
Bloomberg Commodity Index Overbought
A warning of a break lower in commodities can be seen in the te gap vs the US2/10 year yield spread and the USD has widened which we can see on the charts below – if we see commodities fall crude is very overbought and could fall hard…
Crude Oil Technical Analysis Monthly and Daily Charts
On the monthly chart we have pushed up to test the 2018 highs at 75.00 its a big bull move but if we can breakout here we could move back to 60.00 to correct the overbought condition. In terms of entry the daily chart a clear break of the 72.00 level would in our view, warn of a bigger decline to major support levels indicated – with a possible run all the way back to 60.00.
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