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The US crude oil futures contracts experienced a resurgence of negative trades, resuming their downward trajectory after encountering a formidable resistance level around the psychological barrier of 72.00, resulting in significant losses. It’s worth noting that in a previous analysis, we highlighted the importance of a break below 70.50 as a potential signal for a reversal, leading to a retest of 69.85 and establishing a lower level at $68.24 per barrel.
Technically, the simple moving averages continue to exert negative pressure from above, complemented by clear negative signals on the 14-day momentum indicator. This reinforces the bearish scenario, particularly with trading persisting below the now-converted resistance level of 70.80. The initial target is set at 67.10, emphasizing that a breach below this level enhances and accelerates the strength of the downward trend, with the next official target at 65.85.
It is crucial to note that the reestablishment of trading stability above 70.80, confirmed by at least an hour candle closing, has the potential to postpone the bearish scenario. In such a scenario, we may witness attempts to rise, targeting 71.80 and 72.30 initially.
Two warnings accompany this analysis: Firstly, the risk level is considered high, cautioning against potential challenges in trading decisions. Secondly, today brings the anticipation of high-impact economic data from the US, including inflation numbers via the “Producer Price Index,” a Federal Reserve Committee statement, a Federal Reserve press conference, interest rate decisions, and economic forecasts. This may lead to significant price fluctuations at the time of the news release. Exercise prudence in navigating these potentially dynamic market conditions.
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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