By Yan Petters – Crude oil recently saw a sharp bullish movement that was initiated on July 30th. A barrel of crude oil gained close to $7 in less than a week, taking the commodity as high as the $82.90 level. However, after several failed attempts to breach through the $83.00 level, crude oil seems to be trading within a narrow range, and might even face a technical correction today.
• The chart below is the crude oil 4-hour chart.
• The technical indicators used are the Bollinger Bands, Slow Stochastic, MACD and Relative Strength Index (RSI).
• The bullish channel that took place until August 3rd seems to have reached its peak at $82.90.
• For the last couple of days, crude oil saw modest fluctuations, without showing a clear trend.
• The Slow Stochastic provides a series of bearish crosses at the moment, stating that the bullish trend is losing momentum.
• The MACD has completed a bearish cross for the first time in almost 2 weeks, suggesting that a bearish correction might take place soon.
• The RSI has declined below the over-bought zone and continues to point down, further indicating that a bearish move could be imminent.
• Crude oil’s two significant support levels appear to be at the $81.55 and the $81.00 levels.
• The next significant resistance levels seem to be located at the $82.60 and the $83.00 levels.
• Once crude oil will breach both of the levels (either support or resistance), it will be a strong indication for the beginning of a long-lasting trend.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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