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Crude Oil war between Bulls and Bears because of Macro factors


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Again in the energy segment, Crude Oil is taking the spot light. RecentInventory reportsandUS Iran sanctiondrama has kept the Investors astray on Oil prices. Global Crude Oil benchmarks posted a fourth straight gain matching its longest short-term rally since July 20. But still in the Intermediate time frame, Oil prices are range bound. Heres thePrice action Outlookon 4h MCX chart of crude Oil.

MCX Crude Oil Chart - Price action forms accumulation phase

In commodities,4h time frameis referred as dealers chart. Its because most of the International commodity dealers use this time frame to route orders and make decisions. Hence we can get an insight onIntermediate termby doing Price action analysis on 4h chart.

Since Mid-July the overall Market condition is neutral and Range bound. From august onwards, Bearish momentum increased and sellers tried to push the prices downside. On the other hand, Bulls defended thesupport zonedespite multiple tests and absorbed the selling pressure. These back forth movement indicates the Tug of war between bulls and bears.

Fundamentally, US Sanctions on Iran are due to come into full force in November. It can potentially impact the global Oil supplies. Inventory report on Wednesday reported a fall in Oil inventories by 5.836 million barrels compared to last week. If this continues further then crude oil supplies might decrease drastically. MajorInstitutional investorswill pay attention to news and events related to these factors in upcoming weeks; hence it can affect themarket sentiment.

Based on Wyckoffian Perspective, the formation also looks like anAccumulation phase. Some smart players are bidding at support, thats why prices are bouncing back from the support zone. Whether the accumulation succeeds or not is something we should wait and watch. Further development of Price action would be interesting to keep an eye on. Traders must watch the Crude Oil price action and related fundamentals to makeinformed trading decisions.

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About the author


Balaji is a Trader, Investor and Self published Blogger. He wrties frequently on his website www.tradingcoach.co.in Balaji is specialised in applying systematic Price action trading strategies and Global Macro techniques on financial markets such as Equities, Dervatives, Futures and Bonds. He is well versed on both International and domestic markets and has trading experience of more than 8 years.  
 
As a trader his core purpose is to generate superior risk adjusted returns on consistent basis by applying Flexible risk managment combined with a Postive expectancy of Price action strategies. He writes passionately about Technical analysis, Trading strategies, Price Action setups and Global macro events. 
 
Apart from trading and Blogging, Balaji also mentors aspiring traders, Investors on becoming succesful in highly competative financial markets. He offers permium trading course on which he covers Price action trading methods, Institutional trading strategies and Macro trading.

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