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Crude Oil D1 – Still sellers in the market

OANDA:BCOUSD   Brent Crude Oil
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On the 7th of May a scenario was discussed where the Crude Oil market might be gaining downward momentum. This was because, following a recent uptrend, the price broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both confirming that a possible technical reversal might be in progress.

A critical support level formed when a low was recorded at 69.251 on the 6th of May. Buyers then tried to push the market higher but have still not succeeded. A possible resistance level was suggested at 73.390 where a Shooting Star Candle formed on the 30th of April. In the meantime, another Shooting Star Candle formed on 13 May, reinforcing the fact that demand have not been able to overcome supply.

The conclusion remains that if the price of Crude Oil manages to break through the critical support level at 69.251, three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 69.251 and dragging it to the top of the possible resistance level at 73.390, the following targets may be calculated. The first target can be predicted at 66.693 (161 %). The second price target can be anticipated at 62.553 (261.8%) and the third and final target may be expected at 55.856 (423.6%).

If the possible resistance level at 73.390 is broken, the anticipated scenario is invalidated and will need to be re-evaluated.

As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for Crude Oil market on the D1 time-frame will remain bearish .
Comment: The possible resistance level at 73.390 was touched but not broken and a more aggressive trader could have left the order open with a possible down trade been engaged. This position would have reached its second target.

More conservative traders could have closed the trade when 73.390 was touched and this is also acceptable. It is important to trade in line with your personality type and risk taste.
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