Red lines- bullish channel
blue lines- bearish divergence
Oil price is under pressure again today. Price is trading around $86.70 as it moves closer to the lower channel boundary. In a previous analysis when price was trading above $91, we warned traders that a pull back was imminent and justified. Despite still trading inside the red upward sloping channel, Oil price was showing signs of weakness. The up trend was weakening according to the bearish RSI divergence. That is why we expected a pull back. Price is now challenging the lower channel boundary support. The RSI is in the middle of the range with a negative slope. The chances of Oil price continuing lower remain high. Support is found at $85.60.
