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 Friday, crude oil lost 0.84% after oil investors digested the EIA report (which showed that U.S. crude inventories increased for a seventh week). As a result, the black gold invalidated the earlier breakout above the upper line of the consolidation once again. Will this negative development encourage oil bears to act?
Today’s alert is going to be very brief, because crude oil didn’t do anything new. It moved a bit higher after the market’s open and re-tested the upper border of the blue consolidation and the key resistance zone created by the previous highs. Despite this move, the commodity reversed and decline, closing the day under mentioned levels.
This is a repeat of what we already saw earlier this year, which means that the comments that we made on Friday remain up-to-date also today and if you haven’t had the chance to read our last alert, we encourage you to do so today.
We will provide you with a bigger update once we see more interesting developments on the crude oil market.
Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager
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