Oil Prices May Be Heading For A Major Breakdown

seekingalpha10-19

Oil prices are nearing the critical $66 support level.A break below $66 could signal a drop into the mid-$50s.Lower oil prices could lead to lower yields short-term.Falling oil prices could lead to a ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOil Prices May Be Heading For A Major Breakdown\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-19 01:18 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4727680-oil-prices-may-be-heading-for-a-major-breakdown><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Oil prices are nearing the critical $66 support level.A break below $66 could signal a drop into the mid-$50s.Lower oil prices could lead to lower yields short-term.Falling oil prices could lead to a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4727680-oil-prices-may-be-heading-for-a-major-breakdown\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NDX","symbol_name":"纳斯达克100指数","start_time":0,"source_url":"https://seekingalpha.com/article/4727680-oil-prices-may-be-heading-for-a-major-breakdown","article_id":"2476299538","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1757271699/image_1757271699.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2476299538","pubTimestamp":1729271931,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Oil prices are nearing the critical $66 support level.A break below $66 could signal a drop into the mid-$50s.Lower oil prices could lead to lower yields short-term.Falling oil prices could lead to a ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NDX":"纳斯达克100指数"},"translate_title":"油价或将迎来重大突破","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NDX":0.9},"content_text":"Oil prices are nearing the critical $66 support level.A break below $66 could signal a drop into the mid-$50s.Lower oil prices could lead to lower yields short-term.Falling oil prices could lead to a stronger USD-JPY.Jeremy Poland Oil prices (CL1:COM) are making a second move lower and are again within striking distance of that all-important support level at $66, which goes back years. The last time oil made a move down to $66 was in early September. That time, it survived and rallied back to roughly $78.50, which helped push interest rates in the US higher and weaken the Japanese yen. As noted previously, the $66 price has acted as a support and resistance level since 2017 and has been acting as such again more recently. A break of support in oil at $66 would probably not be a positive signal for global growth, especially given how much China is working towards stimulating its economy presently. TradingView Global Implications During periods of strong global growth, one would think that oil demand rises as energy needs increase. Likewise, during periods of economic slowdown, demand would fall. However, the current scenario with falling oil prices suggests that demand is not solid or that there is potential oversupply. The odd thing is that China, which has the second-largest GDP, is trying to get its economy going again, but oil prices are still not responding positively. This would either suggest that the oil market simply thinks that China's measures are not sufficient to help the Chinese economy, or that growth in the rest of the world won't have a strong effect on meeting supply. What is even stranger is that the US economy is supposed to be very strong as well, with the Atlanta Fed GDPNow model indicating real growth of 3.4% in the third quarter. This raises questions about oil's weakness and could suggest that the oil market does not see future global growth as sufficient to meet supply. Approaching Support The technical charts show that if oil were to break $66 on this second attempt, it could lead to its dropping to around $57. Certainly, momentum in oil has been bearish as measured by the relative strength index. Additionally, as measured by the RSI, oil is not currently oversold, and it still has room to fall, given that the lower Bollinger band is around $66, also suggesting that oil is not oversold. TradingView Another technical point is that oil fell out of a symmetrical trading pattern in early September. In October, it retested the breaking of that technical pattern and failed, turning lower, which would suggest that a retest of $66 is likely coming. TradingView Impacts on Rates And The Japanese Yen The move lower in oil could result in 10-year rates moving lower, as the two have been highly correlated over time. This is partially because of oil's impacts on energy prices and, thus, on US inflation rates. TradingView Additionally, the USD-JPY (USD:JPY) is highly correlated to oil prices and the 10-year rate. It weakened from around 140 in September to 150 in October as oil prices rose and interest rate differentials widened. But should oil move lower and 10-year rates adjust accordingly, then spreads will likely begin to narrow again, leading to the USD-JPY strengthening. TradingView The last time oil was trading at around $69, the USD-JPY was trading at around 140, versus its current 149.50. The technical setup in the USD-JPY also suggests that it fall back to 140. The pattern shows a pole with an upsloping flag, which can be a bearish pattern that breaks lower. It would suggest that the USD-JPY return to 141.50. TradingView A stronger yen would also make sense, given its relationship with lower oil prices over time. Since Japan mainly imports energy, rising oil prices can hurt economic growth, weaken the yen, or help the economy when prices fall. Final Impacts Of course, if oil prices continue to hold support at $66, then the commodity will again survive and likely see a sharp rebound to the mid-to-upper $70s, pushing higher rates and likely leading to the strengthening of the yen.  At present, the odds appear to favor a break of support, just given the technical setups and the fact that oil doesn't seem to be as oversold this time as it was last time.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.0","shortVersion":"4.29.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2476299538"}