The recent test of sub-$70 oil prices appears to have been met with significant buying interest, potentially setting the stage for a reversal back above the $77 mark. The presence of a long wick followed by an inside bar could signal further upward momentum.
Bull Case:
There's strong evidence of support, particularly from the buying activity observed a few days ago. Although we remain in a bearish stance, having not closed above $77.58, breaching this level could set us on a direct path towards retesting the $95 level.
Bear Case:
However, it's critical to consider the inability of oil prices to break through the monthly or weekly downtrend angles. The notion of retesting $95 seems overly optimistic at this stage. It's more realistic to anticipate a rebalance at the bearish candle, tempering expectations. The $77.58 mark could act as a formidable barrier, potentially driving prices back down to around $67.
Conclusion:
The market is currently exhibiting a wedging pattern, which is generally unfavorable for long-term positions. Should we witness an opening and closing above this bearish order block, it may pave the way for a retest of the $80 levels.
Bull Case:
There's strong evidence of support, particularly from the buying activity observed a few days ago. Although we remain in a bearish stance, having not closed above $77.58, breaching this level could set us on a direct path towards retesting the $95 level.
Bear Case:
However, it's critical to consider the inability of oil prices to break through the monthly or weekly downtrend angles. The notion of retesting $95 seems overly optimistic at this stage. It's more realistic to anticipate a rebalance at the bearish candle, tempering expectations. The $77.58 mark could act as a formidable barrier, potentially driving prices back down to around $67.
Conclusion:
The market is currently exhibiting a wedging pattern, which is generally unfavorable for long-term positions. Should we witness an opening and closing above this bearish order block, it may pave the way for a retest of the $80 levels.
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