Written by: Harish Shahi, Sr. Commodity & Forex Analyst
An overview of daily technical chart shows that earlier crude was making successively higher highs and higher lows and was heading towards north side. The bullish momentum can be seen which can’t be ignored but bulls have been arrived at $75.50 level which is a strong supply zone as it has received supply from this level 2 times earlier also and once again it seems like history tends to repeat itself as we can see that crude oil started to receive supply pressure at this strong resistance level.
Well the current selloff can be a correction as it has bounced too much or it is an initial signal for trend reversal. Well time will give the answer but we would advise to our traders and investors that don’t go for short as long as $72.50 level remains intact and a valid breakout of this level will give us confirmation of bearish momentum and bears may approach the $70 and $68 levels in near term.
Well RSI , Stochastic indicators are in overbought territories which is providing us trend reversal signal at an initial stage. Presently the pair is trading and sustaining between the caged major and minor EMA lines which is generating neutral to bearish signal for the time being. An engulfing bearish candlestick followed by dark cloud candlestick is also confirming the bearish movement. Odds are in favor of bears and intraday bias remains bearish on the pair.
A bearish crossover on MACD indicator is about to occur on the daily chart however it has occurred on the hourly chart already. The. 75.50 level is immediate resistance level followed by 78.50 whereas 70.10 level is strong key support level followed by 68.20 level.