Trading position (short-term; our opinion): Short positions (with a stop-loss order at $48.56 and initial downside target at $35.24) are justified from the risk/reward perspective.

Although crude oil moved higher after the market’s open supported by the IEA predictions, the commodity reversed and declined in the following hours due to strengthening U.S. dollar. As a result, light crude lost 1.23% and invalidated earlier small breakout above the previous high. What does it mean for the commodity?

Today’s Oil Trading Alert will be quite short, as basically nothing changed on the market since we commented on it yesterday and today’s entire alert could simply be a repeat of yesterday’s issue. Although crude oil moved slightly higher after the market’s open, hitting a fresh high of $44.49, the commodity reversed in the following hours and closed the day under the previous highs, invalidating earlier small breakout. This means that light crude remains below the key resistance zone created by the 76.4% and 78.6% Fibonacci retracement levels (based on the Oct-Feb downward move) and the Fibonacci extensions based on previous pullbacks. Earlier today, we haven’t seen any important breakout/breakdown, which could change the overall situation. Therefore, if you haven’t had the chance to read yesterday’s alert, we encourage you to do so today - it’s up-to-date:

Oil Trading Alert: Oil Bulls Didn’t Give Up

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

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