Red lines- bullish channel
Blue lines- bearish RSI divergence
Oil price is trading around $85-$85.30. Price recently broke down and below the bullish red channel it was in since $67. The recent events in the Middle East pushed Oil prices higher by opening with a gap up this Monday.From $81.50 price reached $87 at the beginning of the week. Price reached the bullish channel and tested it from below. Price seems to getting rejected. What was once support (lower channel boundary) is now resistance. Price is getting rejected at the resistance. Oil price has formed a lower high and a pull back to close the gap ($83.25) is very possible. We consider this bounce due to the Middle East tensions as a short-term counter trend bounce. A new wave downwards is expected.
