The scenario as discussed on the 16th of April ended with the capital protection level being breached as the trade was engaged but soon after demand overcame supply and the market surged upwards.
Today presents another opportunity.
The Crude Oil market, on the H4 chart, was in an uptrend until the 17th of April when a higher top was recorded at 72.565. Supply pressure overcame demand pressure and the market started moving downwards.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 72.231 and 72.565. This can alert traders to a possible technical reversal that might happen in the Crude Oil market.
The price then broke through the 15 and 34 Simple Moving Averages but the Momentum Oscillator has not broken the zero baseline, a warning that there might still be demand pressure in the market.
However, a possible critical support level formed at the previous bottom at 71.018 on the 16th of April and if this level is breached, there might be enough supply pressure to overwhelm any demand that are left in the market.
If the price of Crude Oil breaks through the critical support level at 71.018, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 71.018 and dragging it to the recent top at 72.565, the following targets may be calculated. The first target can be anticipated at 70.063 (161 %). The second price target can be predicted at 68.517 (261.8%) and the third and final target may be expected at 66.016 (423.6%).
If the possible resistance level at 72.565 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 on the H4 time-frame will remain bearish.
Today presents another opportunity.
The Crude Oil market, on the H4 chart, was in an uptrend until the 17th of April when a higher top was recorded at 72.565. Supply pressure overcame demand pressure and the market started moving downwards.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 72.231 and 72.565. This can alert traders to a possible technical reversal that might happen in the Crude Oil market.
The price then broke through the 15 and 34 Simple Moving Averages but the Momentum Oscillator has not broken the zero baseline, a warning that there might still be demand pressure in the market.
However, a possible critical support level formed at the previous bottom at 71.018 on the 16th of April and if this level is breached, there might be enough supply pressure to overwhelm any demand that are left in the market.
If the price of Crude Oil breaks through the critical support level at 71.018, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 71.018 and dragging it to the recent top at 72.565, the following targets may be calculated. The first target can be anticipated at 70.063 (161 %). The second price target can be predicted at 68.517 (261.8%) and the third and final target may be expected at 66.016 (423.6%).
If the possible resistance level at 72.565 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 on the H4 time-frame will remain bearish.