Key levels for Crude Oil WTI after 200 day SMA breakout
MarketsFN Team
Today is the third session Crude Oil trades above its 200 day SMA since July of last year. The bearish trend had seen the commodity to slide from 95$/barrel to 63.64$, with a loss of 33%.
What is happening now could be just the beginning if Hedge Funds, which were shorting Crude Oil, would be forced to cover, adding bullish pressure and likely triggering another positive wave.
Crude Oil is trading at 79.43 $/barrel, down 0.25% and next test could be area 83.6, a 5.2% increase from current prices. Above this level there would be the psychological level of 90.
If momentum would decrease are possible then the following scenarios:
A test of 83.6 and a retracement with a trading range formation and lower side at 63.64. This would be a intermediate term range described by uncertainty among market operator expectations.
A more rapid price selloff triggered by a catalyst which would see Crude Oil retracing quickly before making further advances and placing itself below both the 200 day SMA and the static support of 74.13. This is the most unlikely scenario but for risk management purposes should not be ignored.
