Missed the breakout on WTI crude oil earlier on?
You might still have a chance to hop in the selloff on this quick retest!
Check out the resistance levels I’m watching.
WTI Crude Oil (USOIL): 1-hour
It looks like crude oil bears are back in action!
The commodity price fell through the bottom of its falling wedge visible on the short-term time frames, hinting that a drop of the same height as the chart pattern is in the works.
Before that happens, though, a pullback might be needed to attract more sellers. The handy-dandy Fib tool reveals that oil is already testing the 38.2% retracement level, which might keep gains in check.
If so, price could fall back to the swing low at $72.21/barrel or lower. A higher correction, on the other hand, could reach the 50% Fib near the broken wedge support around $75/barrel.
Technical indicators are suggesting that the odds are in favor of more bearish moves. The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside while Stochastic is already reflecting exhaustion among buyers.
Commodities and other risk assets have been on shaky footing over the past few days, owing mostly to upbeat U.S. data pointing to more rate hikes by the Fed.
However, crude oil managed to pull up early this week on hopes of stronger demand from China, as the economy is gradually reopening.
In addition, supply concerns are coming back in play, after a major earthquake hit Turkey and damaged operations in the Ceyhan oil terminal.
Better keep close tabs on the upcoming inventory reports from the API and EIA later this week to gauge if the oil selloff could carry on!
