Daily chart
Crude Oil, after yesterday's session closed with a bearish candle, today continues to fall below 93.00 dollars a barrel.
The increase in supplies is putting downward pressure on oil prices. Crude stocks in the U.S. rose for the eighth consecutive week as refinery output rose to a high of 24, according to the Energy Information Administration. Inventories increased by 2.6 million barrels, to 388 million barrels and refinery production increased by 123,000 barrels.
Oil prices fell today ahead of the resumption of talks between Iran and the major powers on the nuclear programs, as oil traders believe in a positive outcome of the negotiations launched around the Iranian oil.
So the outlook remains bearish, although technically the prices are already in extremely oversold zone and while it might touch the levels of 90.00 dollars a barrel we can expect a bounce at any time.
H4 chart
In the 4 hour chart we have a similar picture from a technical standpoint. After failing in its area of 2/8 (red line), it is considered as an important area of reversal, crude oil is trading below this point and transfer its uptrend line formed by the red line. It is possible that due to the downward pressure that keeps the prices fall even below this line to find your next support around 91.00 or 90.63 where the line 1/8 of Murrey lines is placed.
H1 chart
Finally at 1-hour chart Crude Oil is below the line of 6/8 (red line) and now the support line 5/8 (green line) which becomes the top line of your trading range comes. Although this line acts as support, however there is downward pressure given the high probability of entering prices below this area to continue descending even below the line 4/8 which would be the neutral zone, it also coincides with the baseline (green line) of its band of gravitation.
Although fundamental data suggests that the oil continues to fall, we do not suggest selling into this area because the risk factor is high because it is oversold areas. Instead, we must be vigilant to see a good buying opportunity when this scenario is seen more clearly.
If you have any questions or suggestions, please contact me right through:
Email:antonio.inga@analytics.instaforex.com
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