By Anton Eljwizat – Crude oil prices soared today to the highest level since October 2008 as belief in the U.S. recovery from the global recession gained strength.
Oil traders were reacting to a flurry of encouraging news during the last few days, including Friday’s Labor Department data showing that U.S. payrolls had risen by 162,000 in March and Thursday’s reports from automobile manufacturers indicating that sales had accelerated in March by more than 24% from the same month a year earlier. However, as I will demonstrate below, the price of oil may very well be heading for a reversal. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal.
• Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.
• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.
• Point 3: The Williams Percent Range has peaked near at the 0 marker, which means that there may actually be a strong level of downward pressure.
Crude Oil Daily Chart
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