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WTI Crude Oil Slides Below Rising Trendline
(5/4)
WTI Crude Oil daily 5/4/2012
!["WTI](http://www.ibtimes.com/"http://www.fxtimes.com/wp-content/uploads/2012/05/wticrude05082012h4.gif")
WTI Crude Oil fell sharply after Friday's NFP, more than 5%
off its levels above
100.50
down to
95.60
to start the 5/7-5/11 trading week. So far, through the 5/7
and 5/8 sessions, the market has been trying to hold prices above
this
95.60
support
pivot, which was seen as
support
back on Feb. 2, 2012 (seen in the daily chart).
The price action in the 4H chart shows a possible
double bottom
forming, confirmed if the market can push above
98.25
. The RSI dipping way below 30 was a bearish sign, but in the
very short-term it can be a sign of
oversold
condition. The fact price is trading at the lower bollinger
band (here 3 standard deviations from the 200SMA) also suggests
oversold
condition relative to the recent
consolidation
from April 9 to May 2 before it started to drop
precipitously.
!["WTI](http://www.ibtimes.com/"http://www.fxtimes.com/wp-content/uploads/2012/05/wticrude05082012d.gif")
The daily chart shows that price action is also at the 200-day
SMA. The RSI broke below 40 showing loss of bullish momentum and
is kissing 30, reflecting introduction of bearish momentum. With
the consideration that a bearish
trend
could be developing, a bullish outlook from the 4H
double bottom
should be limited. Perhaps the previous
support
at
100.50
will become an area of renewed selling. The
100.00
psychological barrier might also provide
resistance
.
From the
100-100.50
resistance
area, the first bearish outlook can be the
95.60
pivot, in case the market starts to consolidate sideways instead
of continuing the
trend
. But further downside can be seen especially if risk aversion
persists. The next
support
pivot is
92.45
.
A weaker WTI Crude price could be a confirmation for a weaker
Canadian Dollar since the two are correlated. As WTI fell from
106.25
down to
95.60
, USD/CAD rallied from
98.25
up to the
1.00
parity level.
1.0050
is key
resistance
for USD/CAD, and if WTI does continue lower than
95.60
, USD/CAD should also be breaking above that key barrier.
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Fan Yang CMT is a forex trader, analyst, educator and Chief
Technical Strategist of FXTimes
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from sources believed to be reliable, author does not guarantee
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trading set-ups or any accompanying chart analysis.
Original Source:
http://www.ibtimes.com/articles/338875/20120509/wti-crude-oil-trying-find-support-95.htm
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