WTI Crude Oil (US OIL) has started Monday’s trading testing resistance of a trading range that has been developing for the last seven days. Currently resistance is marked by Fridays high at a price of 42.73bbl. If prices trade above this value it opens the possibility that prices are completing an A-B-C correction from the October high at $50.90. In this bullish scenario traders looking for a breakout may first target the November high at $48.33, followed by the previously mentioned October high.
If prices fail to breach resistance it would suggest that WTI is set for further consolidation, or a bearish breakout under support. Support is currently referenced from the November 19th low at a price of $39.87. A decline under this value would signal a potential continuation of Crude Oils current downtrend, which has already declined as much as $24.83 a barrel from the May 2015 high at $62.56. In this scenario the previously mentioned A-B-C correction would be invalidated, and traders may begin to target 2015 lows at $37.73