Oil: Facing Negative Pressure

US crude oil futures prices declined significantly during the previous session, to reach its lowest level at 38.27.

Technically speaking, looking at the 4-hour chart, we find the stochastic indicator trying to provide positive crossover signals, but the SMA 50 continues to pressure the price from the top. Although the technical signals contradict each other, we tend to be negative below the previously broken support 39.20, knowing that stability below 38.70 facilitates the mission required to visit 37.85, bearing in mind that breaking the latter extends losses towards 37.20 / 37.40.

Back above 39.20 is able to negate the suggested scenario, and oil prices will begin to recover with the first target of 39.70, and the gains may extend later towards 40.20.

Warning: The level of risk may be high.

S1: 38.35	R1: 39.20
S2: 37.85	R2: 39.70
S3: 37.40	R3: 40.20