Crude oil has been on a sharp rise these days, but can it sustain its gains beyond this longer-term area of interest?
Take a look at these turning points I am watching on the 4-hour time frame.
Crude Oil WTI (USOIL) Chart by TradingView
Geopolitical tensions are back in the market mix these days, sending the energy commodity higher again amid supply concerns.
As it turns out, ceasefire negotiations began to collapse after Israel claimed to have killed Hezbollah’s top commander in an operation in Beirut earlier this week.
This, coupled with the risk appetite boost from the dovish FOMC statement, has sent crude oil near the 50% Fibonacci retracement level on the 4-hour chart.
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on market sentiment and crude oil yet, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
A larger correction could take crude to the 61.8% level near the key psychological level of $80 per barrel, which acted as resistance in May and support for much of June and July.
Oh, did I mention it’s about the R2 price ($80.22 per barrel) and the dynamic turning points at the moving averages as well?
The 100 SMA recently crossed below the 200 SMA, suggesting that the path of least resistance is to the downside or that selling is likely to resume, which could send WTI crude oil to a low near S2 ($74.16/bbl) or to the June low near S3 ($72.25/bbl).
No matter how you trade this setup, make sure you follow your trading plan and use the best risk management moves so you can trade another day!