When it comes to trading crude oil, understanding the current trend is essential. Right now, crude oil is within a downtrend, accompanied by a larger symmetrical triangle consolidation pattern. This pattern suggests that the price is retracing its previous decline, but there is still potential for a further decline to test the recent low of 72.73 or even the lower boundary of the triangle as support. Keep an eye on the 20-Day Moving Average (MA), as it could act as resistance and signal the high point of the current bounce.
In order to improve the near-term outlook for crude oil, a daily close above the 20-Day MA is needed. However, since the overall trend is still down, we can expect a continuation of the downtrend once the current bounce is complete. Another key level to watch is the 200-Day MA, which is currently at a price of 80.04. This level coincides with the most recent swing high of 81.0, creating a potential resistance zone from 80.04 to 81.0.
What about the significance of this week’s low of 72.73? Interestingly, this price level coincides with the completion of a falling ABCD pattern, formed by the two most recent downswings. When price symmetry is matched between the AB and CD legs of the pattern, a pivot point is identified. The bullish reaction from this price zone suggests that the market has taken notice, potentially leading to a rally into higher targets before another downturn.
For a comprehensive list of today’s economic events that may impact crude oil trading, be sure to check out our economic calendar on Extreme Investor Network. Stay informed and make strategic trading decisions based on the latest market insights.