Hope you had a great week last week and are enjoying the weekend.
In this article i will be taking a look at US Oil and giving my view of where i believe we could see price go next.
So first of all below we have the weekly timeframe chart which i have kept very simple to highlight where price currently is and what we are seeing at this zone.
Overall since the turn of 2019 US Oil has shown a strong bullish trend which has taken price to the zone of $64.25.
Price Over the last week has shown a struggle to break and close above the resistance area of $64.25. Price has formed a weekly candle showing a rejection from this level which is also known as a shooting star characteristic candlestick. This shows the possibility that price could show a rejection from this zone.
Looking left we can see that this zone was previous support and therefore may now act as resistance. This is not to say that price could not roll over to the upside on continue bullish through the $64.25 zone.
Now going down to the daily timeframe below we can see that price failed to break the resistance 3 times, with price on friday closing as a gravestone doji.
As price has now shown a deep retracement for a while, could we now be in for a deep retracement for US Oil?
We have an ascending trendline on the chart which shows two rejections, it is possible if we see downside barriers broken that price could come back down to the area of $60.00.
Our 50 EMA is currently following our ascending trendline and therefore if we was to see price back to the $60.00 zone we could also see price back at our 50 EMA.
Before seeing price head towards the $60.00 zone we would first need to see further barriers broken on the 4 hour timeframe below.
Taking a look at the 4 hour timeframe below we can see price last week showed signs of potential bearish market structure. This would be the first sign we would need to see for a possible deep retracement. Price formed a lower low and then retraced back to the zone of $64.25 for a third rejection.
If we was to see price break below the area of our 50 EMA with a retest continuation this would also show signs of further downside potential.
The key barrier before the zone of $60.00 would be the $62.00 zone, a break of this zone would really open the potential to see price back at the ascending trendline and $60.00 zone.
Over the next week i will be watching Oil very closely for the following:
James at Technical FX122