Crude Oil Price Forecast: Faces Increased Selling Pressure

FXEmpire.com -

WTI crude oil tested the bottom range of a two plus week tight consolidation zone with today’s low of 76.90. That is a six-day low and crude oil is on track to close at its lowest daily closing price since February 26, not to mention the lowest daily close of the current consolidation phase. This is a sign of weakening, although within consolidation.

Nonetheless, it indicates increasing selling pressure and follows multiple tests of resistance at the convergence of a downtrend line, 200-Day MA, and 20-Day MA. Further, the area around the uptrend line has been attempting to hold as support. Today’s bearish price action decreases the chance that the uptrend line will remain a price support area and increases the possibility of it representing resistance.

Chance for Bearish Continuation is Increasing

The chance for a continuation of the bear trend is increasing. Recent failed attempts to breakout above the 200-Day MA, the more significant trend indicator, have failed and we’re now seeing increasing signs of weakness. The week ends tomorrow and unless the bulls take back control crude oil is set to end the week with a bearish candlestick pattern.

A bear trend continuation signal will be given on a drop below last week’s low of 76.83. Last month’s low of 76.86 was already busted once earlier this month. A drop below that low will provide a second monthly bearish signal. The next lower target zone includes the 61.8% Fibonacci retracement at 75.49, along with the bottom trend channel line. Further down is the 78.6% retracement at 72.11.

Rallies Will Again Deal with Solid Resistance Zone

On the upside, a rally above today’s high of 79.14 sets up another test of trendlines and moving average as resistance. One thing to consider is that when multiple lines identify a similar price zone, it becomes more significant. For crude oil, that significance may be experienced as strong resistance leading to a bearish continuation, or a key pivot where an upside breakout may trigger strong momentum.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.