Support Becomes Resistance – Is It Good Time to Sell Crude Oil?
Arslan Butt • 1 min read
What’s up, traders,
It’s been a good day so far as team FX Leaders managed to capture four winning forex trading signals to close the week in green. Are you ready for the next trade?
Well, I was looking at the WTI crude oil chart when I noticed that crude oil has completed 61.8% retracement at $71.85 and now it’s trading right below this level. The same level worked a pretty strong support on Thursday before it got violated on bearish EIA report.
The inventories report showed a build of more than 5 million barrels for the previous week, which clearly signals China and the US trade war seems to impact crude oil demand.
At the moment, crude oil is looking bearish for three reasons:
- Crude oil is testing 20 periods EMA which is providing a solid resistance to $71.85.
- Crude oil has formed a shooting star candlestick pattern right below the major resistance level of $71.85.
- The Stochastics is also trading in the overbought zone. Which means, we may see bulls getting out of the market now.
Crude Oil – Trade Idea
The idea is to stay bearish below $71.85 with a stop above $72.25 to target $71.25 and $70.85. Good luck!