Crude Oil Starts to Reverse Back Up, After the Decline Yesterday

Crude Oil has been trending higher for more than a month, following the crash during March and April, which sent US WTI crude to -$37. Saudis were pumping Oil and flooding markets with it, leaving US producers with no place to store their production.

But, eventually the situation improved and the world didn’t end due to coronavirus, so the sentiment has improved somewhat in the last month. US WTI crude reversed higher and, after finding resistance at moving averages for some time, the price eventually moved above them and the same MAs turned into support now.

The trend slowed down in the last few weeks, but the 50 SMA (yellow) did a good job in providing support and keeping the uptrend going. But, the 50 SMA was broken yesterday on the H4 chart. Crude Oil lost around 350 pips, but it didn’t reach the $30 level, where I was planning on buying Crude Oil.

The price formed a couple of doji/hamer candlesticks, which are reversing signals and now buyers are in charge again. But, the 50 SMA might turn from support into resistance now, so we will follow the price action when it gets up here, to see if buyers live it there, where we might go short if we get bearish reversing signals at the 50 SMA.