Crude oil reacts to a plethora of news and events. Some of them are the US crude oil inventories, the US dollar, President Trump's tweets, OPEC production, the crisis in Venezuela, the sanctions on Iran, etc. Let's see what the chart forecasts.
Crude oil had been in a recovery since 2016, which carried it from below $30 per barrel to above $75 per barrel. However, the risk-off sentiment in the final quarter of the previous year saw some heavy profit booking in crude during which the price dropped from $76.88 per barrel to $42.34 per barrel.
Currently, WTI has risen smartly from its December lows but is facing resistance between the 38.2 percent and 50 percent Fibonacci retracement levels of the recent fall. The previous uptrend line will now act as the resistance and it is close to $60 per barrel. Hence, this level should act as a major hurdle.
On the downside, any dip to the 50-day SMA should attract buying. $50-$52 per barrel is a strong support. Hence, you can wait for a fall and rebound from close to $50 per barrel levels to buy. Conversely, if the price rebounds from the 20-day EMA and breaks out of $57 per barrel, it can rise to $60 per barrel. This is a short-term trade. The stop loss for this can be kept at $54.90.
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