Daily chart
Crude Oil fell below $100 during the first trading day this week, breaking the support area which was bounded by the line 0/8 (solid line) considered last stand area. So far today, Tuesday the price continued to fall, however we have no support at the 98.44 area which possibly retract the topside because technically prices are in oversold zone.
Investors are waiting for oil data from the Energy Information Administration of the U.S., which is set to be released today, and the U.S. payrolls data for September is to be released on Tuesday to more clues about the country's oil demand.
H4 chart
Similarly, the 4-hour chart shows us that Crude Oil is in extremely overshoot area, because in this time frame line -2/8 that according to the theory of Murrey lines becomes the last zone overshoot and reaches only in extreme cases. On the other hand, there is also the fact that downward movements in this area are getting shorter and there are signs d exhaustion. The fact that the price is also very close to the bottom line of its trading band stops confirm a possible bounce from these levels.
H1 chart
Finally while doing this analysis we observe a decision engulfing candle to the upside after finding a stand for several hours at the 98.80 area, where line 1/8 is placed that although it is considered a weak support line. Also keep in mind that if the price is stopped in this area for some time, it is a sign of a possible rebound. All this seems to confirm our expectation of an upward bounce from this area.
Our recommendation: Based on our analysis of three charts , our recommendation is to go above 98.80 buying a pretty tight stop loss of 50 pips, which can be placed at 98.30 for a potential profit of at least 200 pips up 101.50.
If you have any questions or suggestions, please contact me right through:
Email: antonio.inga@analytics.instaforex.com
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