Oil Price Reversal in Progress / Commodities / Crude Oil

Let'stake a closer look at the chart below (chart courtesy of www.stooq.com ) and assess the likelycrude oil price path ahead.

Wewrote these words yesterday, and they ring true also today:

(…)The short-term situation hasn’t changed much. Crude oil futures keep tradinginside the blue consolidation and around the red support/resistance line andthe 50% Fibonacci retracement.

They’realso still trading inside the rising purple trend channel below the upperborder of the orange gap. Therefore as long as there is no breakout above theseresistances another attempt to move lower is likely.

Yesterday’scandle shows that bulls have been rejected at the upper border of the blueconsolidation, and the bears keep the initiative today. They’re currentlyworking to close the bullish green gap, as black gold is trading below $56.25as we speak. The daily indicators are supporting the downside move, and thebears’ next target would be to break down from the blue consolidation.

Summing up, afteryesterday’s upswing that partially fizzled out, crude oil is moving lowertoday. While the short-term picture remains unchanged, prices have backed downfrom the orange resistance and back below the horizontal red line and the 50%Fibonacci retracement. The bears’ objectives are closing the green gap andbreaking below the lower border of the blue consolidation reinforced by the38.2% Fibonacci retracement. The short position remains justified.

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Nadia Simmons
Forex & Oil Trading Strategist
PrzemyslawRadomski
Founder, Editor-in-chief

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