Will Crude Oil Fall Below $60?
Crude Oil continues the bearish momentum that it started in June last year, and despite the bullish gap at the beginning of April which sent the price above $80, sellers remain in control. The 200 SMA (purple) stopped the climb last month after buyers pushed the price above the 100 SMA (green) which has been the traditional resistance indicator.
But, it seems like the smaller moving averages are resuming that job once again, as the selling pressure picks up. Last week we saw a dive toward $64 as the banking problems resurfaced, but the fears calmed down after JP Morgan took over the First Republic Bank and Oil made a strong reversal, forming a hammer which is a bullish reversing signal.
The bullish reversal came and US WTI crude climbed close to$74, although it seems like the buying pressure has faded again. During the US session, the price of crude Oil declined due to the US dollar gaining momentum. This decline in crude Oil prices also coincided with a drop in stock prices. However, it is important to note that crude Oil is currently in a corrective phase.
The support level around 70.80 was tested, and its significance lies in the potential for a new upward movement. On the daily chart of WTI Oil above, we observe that the market initially experienced a strong buy period after the surprising OPEC+ production cut, which created a gap in the price. However, the market reversed by the middle of April which brought the price down to a low of $64.
This support level around $64 will be crucial to monitor if the price revisits it in the future. Currently, the price has reversed and is targeting the $70 level. If $70 gets broken soon, then last week’s lows will be the next target, after which we will be heading for $60. Although, we will have to watch the economic data in the coming days.
US WTI Crude Oil Live Chart
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