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US crude oil futures contracts experienced a notable decline following the retracement of recent gains, retreating from the pinnacle of 85.58 reached during last Friday’s trading session. As today’s trading commenced, the price hit its lowest point, settling at $81.18 per barrel at the time of compiling this technical report.
Technically, we observe the simple moving averages resuming their downward pressure on the price, acting as a formidable barrier. Additionally, the breach of the 83.90 support level, now turned resistance due to the principle of role reversal, further confirms the bearish sentiment.
Intraday trading below 82.70 suggests a continuation of the corrective decline, targeting initial support levels at 80.40 and subsequently 80.00. A breach of the psychological support at 80.00 would amplify the intensity of the downward correction, potentially leading to a direct descent towards 78.40.
Conversely, achieving at least an hour of candle closure above 82.80 could mitigate the likelihood of further declines, prompting temporary recovery attempts. Such a scenario may entail retesting the resistance at 84.00 before a resumption of the downward trajectory.
Risk Advisory: Investors should exercise caution given the potential high risk, particularly amidst ongoing geopolitical tensions, which could contribute to heightened price volatility.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.
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