Trading position (short-term; our opinion): Short positions (with a stop-loss order at $56.45 and an initial downside target at $45.81) are justified from the risk/reward perspective.

On Monday, the black gold lost 1.73% as bearish Friday’s Baker Hughes’ report (which showed that U.S. drillers added fresh rigs once again) weighed on investors’ sentiment. In this environment, light crude reversed and declined once again, reaching the 50-day moving average. Will it stop currency bears in the coming days?

Today’s alert is going to be quite short, because crude oil didn’t do anything that would change the outlook on Monday and the same applies to today’s session so far. Yesterday, the proximity to the major resistance zone and the short-term resistance line based on the previous highs encouraged oil bears to act, which resulted in a decline to the previously-broken orange support line and the 50-day moving average. Earlier today, this area triggered a rebound, but despite this move, the commodity remains under the key resistance levels and the outlook is bearish.

We will provide you with a bigger update once we see more interesting developments on the crude oil market - most likely tomorrow.

As always, we’ll keep you - our subscribers - informed should anything change.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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