Crude Oil: How Events Can Change the Price

The oil market gives us a good example of how events can change the price of any financial asset. Here we have Crude Oil (Brent) which moved in the borders of a triangle chart pattern from the weekly timeframe. The news pushed the market upward. The price broke the downtrend line. If the close price of the daily candle stays at the current level, the breakout will be confirmed.

What should we also take into consideration?

1. The market can continue the upward movement until the situation in the oil market becomes stable. We can expect the upward movement in the medium term.
2. For the upward movement, the market will have to break the resistance zone formed by the weekly uptrend line and 70.00 resistance level. The price action in this zone can provide trading opportunities in both directions.

If the price bounces from the resistance zone, it can be possible to open sell trades. It will be only short term trading with an attempt to catch a retracement. But it will be very risky trades.
The breakout above the resistance zone can be used for buying. But if the market corrects the upward movement, reversal signals after that will provide better entry levels for buying.


For both types of trades, we must use the proper risk and money management strategies.