We’re Holding on to Our Sell Signal, As the 20 SMA Keeps Rejecting Crude Oil
Crude Oil turned incredibly bullish since April last year when it reversed from all time lows. It seemed like US Oil was dead and buried, with the price fallin close to $-40, while the world is shifting to renewable energy, which will take Oil cars out of the equation, although that might take some time.
But, the reversal came back then and Oil has been really bullish since then. The growing GDP in China and the US has been helping the bullish run in Oil as the growing economy increases the demand, buton the other hand, other areas like the Eurozone, the UK and US coastal states are still in difficulties, as the restrictions remains quite heavy, denting the economic recovery.
Yet, Oil has been surging, although the surge ended in the first week of this month and the trend has shifted since then. US WTI crude Oil broke below all moving averages this month and it seems like the 200 SMA (purple) has now turned into the ultimate resistance.
We decided to open a sell forex signal last Friday, as buyers were banging their heads against this moving average and the price reversed down by the end of the day. We were around 150 pips in profit as some point, but today we saw a jump on Russia’s comment, agreeing to postpone the production quotas until May. But, the climb ended at the 200 SMA again and now the price is heading back down. We are keeping the sell trade on, as the decline continues today despite the quotas being postponed, which is yet another bearish signal for Oil.
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