By Anton Eljwizat – Following a report from the U.S. Department of Energy yesterday, showing a decline in crude oil supplies, prices shot up and are now being traded at over $74.00 a barrel. However, I will illustrate below that the oil may very well be heading for a reversal. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent entry price.
• The technical indicators that are used are the Relative Strength Index (RSI), Slow Stochastic and MACD.
• Point 1: There is a “doji” candlestick that has formed on the chart, indicating that a reversal should take place.
• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.
• Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.
• Point 4: The MACD indicates an impending bullish cross, which may signal a downward movement is going to occur in the near future.
Crude Oil 4-Hour Chart
Forex Market Analysis provided by Forex Yard.
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