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US crude oil futures prices faced significant downward pressure towards the end of last week’s trading, failing to maintain stability above the crucial psychological barrier at $78.00. This development negated the anticipated positive outlook. In the previous technical report, we highlighted that breaching the support level at $77.35 would nullify the bullish scenario, leading to negative pressure. As expected, the price dipped to its lowest level at $76.08 per barrel during early trading in the current session.
From a technical perspective, examining the 4-hour chart reveals the reemergence of the simple moving averages exerting downward pressure on the price, acting as a barrier. Particularly, the 50-day simple moving average intersects near the resistance level at $77.60, reinforcing its strength, exacerbated by the declining momentum observed on the Stochastic indicator.
Consequently, we anticipate a bearish bias in the upcoming hours, targeting $75.40. A breach below this level would extend the losses, paving the way towards $74.60.
It’s crucial to note that regaining stability above the resistance level at $77.60 would promptly halt the downward trend, facilitating a recovery in oil prices towards $78.40 and $79.10 as the subsequent stations.
Warning: Given the prevailing geopolitical tensions, there is a heightened level of risk, potentially resulting in increased 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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