Verification of the breakout or further declines?
In today’s oil price forecast, I decided to share with you my insights from today’s Oil Trading Alert. Have a nice read!
Technical Picture of Crude Oil
Looking at the daily chart, we see that crude oil futures started Wednesday with another red pro-declining gap ($67.97-$68.12). Although oil bulls tried to push the price higher, their attempts failed, which translated into a reversal and a comeback under the starting gap.
This negative price action triggered further deterioration, which suggests that yesterday’s comments and levels to watch remain up to date also today:
(…) crude oil futures stated the week with the red pro-declining gap ($70.25-$70.38), which accelerated Friday’s decline and took the price not only below the barrier of $70, but also under $69 to the 78.6$ Fibonacci retracement (based on the Sept.10-Oct.8 upward move), which together with the blue supportive gap (67.21-67.47) from Oct. 30 creates the green support zone.
Although this area encouraged the bulls to act earlier today, the sell signals generated by the daily indicators remain in the cards, supporting the sellers and another downswing.
How low could the futures go?
In my opinion, if the bulls fail to invalidate the earlier breakdown under the previously broken pink support line (marked on the 4-hour chart) we’ll likely see not only a re-test of today’s intraday low of $67.75, but also a test of the above-mentioned blue supportive gap or even the upper border of the black declining trend channel (marked on the daily chart) in the coming day(s).
Summing up, crude oil futures opened the day with another red pro-declining gap, which, together with the sell signals generated by the daily indicators, suggests further deterioration and a test of the next supports in the coming day(s).
Have a profitable day, and see you tomorrow.
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Anna Radomska