Trading position (short-term; our opinion): Short position with a stop-loss order at $59.60 and the initial downside target at $53.28 is justified from the risk/reward perspective.

The overall short-term situation hasn't changed much since yesterday. Crude oil futures keep trading in a tight range below a combination of several key resistances. These are the three gaps (marked on the chart with pink, orange and red) and the 61.8% Fibonacci retracement.

As long as the gaps keep putting a stop to the bulls' effort, the way higher is blocked and reversal remains just around the corner. Should we see prices decline from here, the lower border of the rising green trend channel will likely be tested in the coming days.

Summing up, the bulls face ongoing issues overcoming the new set of resistances: the 61.8% Fibonacci retracement, and the three gaps (pink, red and orange ones). There's also the upper border of the rising green trend channel and the Sept 18-23 peaks in the proximity. This formidable combination of resistances could trigger a reversal shortly, and the short position is justified.

Trading position (short-term; our opinion): Short position with a stop-loss order at $59.60 and the initial downside target at $53.28 is justified from the risk/reward perspective.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist