Do you remember the resistance area we identified a few days ago?
Well, WTI has broken above the region!
This time, we look at the possibility of a breakout and retest situation:
West Texas Intermediate (USOIL) 4 hours Chart by TradingView
In case you missed it today Daily market summaryYou should know that the lack of physical escalation in the Middle East and concerns about China’s growth have limited the demand for crude oil.
Meanwhile, traders reeling from expectations of a Fed rate cut supported the US dollar against some of its major counterparts.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on Crude Oil and the US Dollar yet, it’s time to check the economic calendar and stay up to date with daily fundamental news!
US crude oil prices, which reached $78.00 yesterday, have fallen and are now trading near $73.50 levels.
How far can oil fall before the bulls step in again?
We are looking at the psychological handle at $72.00, which represents the 50% Fib retracement level of USOIL’s October bull run. Not only this, but the $72.00 level will also align with the pivot point area, broken trend line resistance, and the 100 and 200 SMA in the 4-hour time frame.
If USOIL does not see green candles and sustained trading above its current levels of $73.50, the asset could fall to a potential support zone where it may attract more buying pressure.
But if the asset continues to see downward pressure, you may want to pay closer attention to our support area. Specifically, bearish candlesticks and sustained trading below the trend line expose USOIL to a potential return to the $68.00 zone of interest below the S1 pivot point line ($68.88) and monthly lows.
Whichever direction you end up trading, don’t forget to practice proper risk management and stay aware of top-notch market triggers when trading this. good luck!