Crude Oil Technical Outlook: Rapidly Approaching Confluent Support
Oil Technical Outlook
- Crude oil declining towards big confluent support
- Relief bounce at the least may be in store
Crude Oil Technical Outlook: Rapidly Approaching Support
Since topping out around long-term resistance near the 76-line crude oil has been nothing but weak. This has an area of confluent support in focus not far below. The trend-line off the massive low created in the wake of the Saudi panic is in confluence with the 200-day moving average.
The two collide around the 60 mark and could at the least provide a floor for a bounce. The trend since the low has obviously been up, and perhaps a low gets put in that leads to another leg higher. But even if that isn’t the case, proper price action may offer traders an opportunity to play for a bounce.
What I will be watching for on this end is volatility around support that hints at an exhaustion in selling. A sharp reversal day could give such indication. The low created during such an event would be viewed as a line in the sand.
Longer-term players who are bullish may view this as a good risk/reward spot to join the trend higher, while short-term traders, as suggested above, could look to play an oversold bounce with a backstop. A break through trend support.
Crude Oil (CL) Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.