The Decline in Crude Oil Stops at MAs
Crude Oil has turned bullish and bearish quite a few times recently. The pressure has been to the downside, since the global economy keeps weakening and demand declines, but we saw a big surge by the middle of September after the attack on Saudi Arabi’s oil production and refining facilities.
But, after Saudis restored facilities and full production pretty fast, crude Oil reversed and the bearish trend resumed. But, OPEC said that they will cut production and quotas further in December and US WTI crude rose form around $52 at the beginning of last week to $57 by Friday.
But, the global economy is still weakening, so there’s no room for too much hope right now. Traders know that and this week crude Oil has slipped lower. Oil formed a doji candlestick on the H1 chart yesterday which is a reversing signal and then reversed lower indeed. Oil found some support at the 100 SMA (green) yesterday for a short period, but then moved below it.
Although, the decline stopped right at the 200 SMA (purple) today and it bounced higher off of it. Now the price is headed higher again, but I think that the other 2 moving averages above will turn into resistance now. By that time, WTI crude will be overbought and if there is a reversing signal such as a doji candlestick, then we might go down from there.
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