Trading position (short-term; our opinion): Short positions (with a stop-loss order at $52.52 and the initial downside target at $45.80) are justified from the risk/reward perspective.

On Tuesday, crude oil wavered between small gains and losses as weaker-than-expected oil demand in China continued to weigh on investors’ sentiment. In this environment, light crude slipped to the lower border of the rising trend channel, but closed the day above it. Will this support withstand the selling pressure in the coming days?

Today’s alert is going to be very brief, because crude oil didn’t do anything that would change the outlook on Tuesday and the same applies to today’s session so far. The only thing that crude oil did on Tuesday is that it moved a bit lower and tested the 38.2% Fibonacci retracement and the lower border of the rising trend channel.

Although these supports triggered a tiny rebound (compared to the earlier downswing), the sell signals generated by the indicators remain in place and the commodity is still trading under the key resistance levels. Therefore, the comments that we made on Tuesday remain up-to-date also today and if you haven’t had the chance to read our yesterday’s alert, we encourage you to do so today.

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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