US Crude Oil Makes A Big Decline After Failing at the 100 Monthly SMA
Skerdian Meta • 1 min read
Crude Oil turned quite bullish towards the end of last year, as the sentiment improved in financial markets, due to comments about a partial trade deal between US and China. But, the main climb came after OPEC+ decided to place additional production quotas, for another 50k barrels/day.
The tensions in the Middle East between US and Iran increased fears of a production disruption in the region, which gave crude Oil another push higher and US WTI crude climbed above $65. But, despite the retaliation from Iran on US military bases in Iraq, the situation calmed down.
As a result, buyers retreated and a reversal took place, which happened right at the 100 SMA (green) on the monthly chart. So, that moving average provided solid resistance and the coronavirus outbreak in China turned the sentiment massively bearish for risk assets such as crude Oil.
WTI Oil broke above the 50 SMA (yellow), which stands at around $54 on this chart, so it seems to be heading towards the big support zone at $50. Let’s see if that support zone will be broken this time, but first let’s see if Oil will fall down there. Anyway, the trend is pretty bearish, so we will try to sell pullbacks higher on smaller time-frame charts.