Oil May Have to Drop Temporarily

US crude oil futures traded positively to nullify the expected negative outlook during the previous session. The commodity touched the stop-loss order that we mentioned in the previous analysis at 40.25, to its highest level at 40.75.

Technically, prices are currently stabilizing below the resistance of the descending channel shown on the chart, with the RSI starting to send negative signals in the short time intervals.

We think that there is a possibility of a bearish slope occurring in the coming hours, targeting a retest of 38.90/39.00 initially.

From the upside, the return of trading 40.70 is capable of stopping the intraday retracement attempts to bring oil into a bullish path, with targets starting at 41.30, followed by 41.60.

It is noted that we are awaiting the data of oil inventories issued by the International Energy Agency (IEA), and may witness high volatility

S1: 38.90	R1: 40.70
S2: 38.05	R2: 41.60
S3: 37.20	R3: 42.45