Remember the support zone we talked about a few days ago?
Well, it turns out the bears had more fuel in the tank than we thought!
Now, USOIL may get a bid from the trend line support that has been holding since early September.
What do you think of this 4 hour setting?
West Texas Intermediate (USOIL) 4 hours Chart by TradingView
US crude oil took another hit last week, driven mostly by concerns about China’s growth and easing tensions in the Middle East, which helped allay some global supply concerns.
But that was last week.
Over the weekend, Israel announced plans to target Hezbollah’s financial operations in Beirut, while China, as expected, cut its benchmark lending rates to help boost the economy with further stimulus.
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!
If tensions in the Middle East flare up again and growth concerns in China ease in the next few days, US oil prices could see continued buying demand.
WTI, which is approaching $68.00, could derive demand from the support of the ascending channel that has been in place since September.
Watch for continued trading above the $70.00 psychological level, the $70.50 pivot point line, or the 200 SMA on the 4-hour chart. Sustained demand above areas of interest could lead to a bullish rally that could take WTI to the $73.00 inflection point.
On the other hand, WTI bulls can maintain their momentum.
If we see WTI prices trading consistently below $68.00, we should at least consider the possibility of USOIL extending the long-term downtrend and reconsider previous support areas like $66.00 or $65.50.
What do you think? What direction will USOIL prices head in the next few days?