Weekly chart
Crude oil started the week with a slight drop from 99.18 to 98.63 after the USA reported about timid economic performance due to the upcoming Christmas holidays. Thus, the CL is finding support on its second monthly resistance level which incidentally is very close to its weekly pivot located at 98.25, which provides an interesting opportunity to buy because chances are that the prices will continue to rise in the next few days though little activity is expected.
Daily chart
However, the daily chart suggests that traders should be cautious. After the fall during the Monday session, crude oil seems to be forming what could be a U-turn as prices ended below its daily pivot in this case located at 98.88 and is finding support on its first day support. Moreover, if we consider the top line of its downtrend channel has acted as a resistance line converging with the same line 8/8 Murrey which is very close to the last reached peak so the other possibility is that the prices would experience a significant drop until at least 96.88.
4-hour chart
The 4-hour chart seems to have clarify the situation because, on the one hand, the prices fell from line 6/8 Murrey and entered below the level of 5/8 (green line). As we know it is the top line of the trading range in which the price returns to a sale area, although it should be confirmed only when the line 4/8 (blue line) becomes the neutral line on which we believe CL may find temporary support and then define its trend in the medium-term. Because of this suggestion, our hope is that the prices would drop even more to enter long positions above 98.30 with a stop loss adjusted only about 30 pips.
If you have any questions or suggestions, please contact me right through:
Email: antonio.inga@analytics.instaforex.com
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