USOIL Anticipates A Significant Bearish Breakout

Market Analysis – December 21

USOIL has undergone a notable shift in market structure after forming a major high at the 87.60 price level. A bearish trend emerged as the price consistently created lower lows, culminating in a daily bearish break of structure. This critical shift has solidified a long-term bearish outlook, reshaping sentiment and setting the stage for potential downside movements.

USOIL Key Levels

Demand Levels: 65.30, 60.50, 55.50
Supply Levels: 71.90, 78.70, 87.60

USOIL Long-Term Trend: Bearish

The bearish break of structure positioned USOIL toward the 65.30 demand level, where it found temporary support. This support triggered a bullish pullback that slightly breached the 71.90 level before encountering resistance within a key daily order block. The resistance within this zone reaffirmed bearish dominance, leading to renewed downward pressure.

Following this rejection, the price entered a consolidation phase. During this period, the daily Relative Strength Index (RSI) indicated a gradual increase in bullish momentum, diverging from the prevailing bearish trend. This dipvergence has prolonged the consolidation period, preventing either trend from asserting dominance in the short term.

USOIL Short-Term Trend: Ranging

USOIL remains range-bound, fluctuating between the 71.90 supply level and the 65.30 demand level. This sideways movement lacks a decisive directional bias, keeping price action constrained. While the market oscillates within this range, the 65.30 demand level remains a critical point of focus. Given the overarching bearish trend, a breakout below this level could trigger significant bearish volatility, reinforcing the long-term downtrend.
As the daily RSI approaches the overbought region, it signals the possibility of a resumption of the bearish trend. Traders should monitor for a breakout from the current consolidation phase while considering forex signals to anticipate renewed downward momentum. A decisive move below the 65.30 level could catalyze further bearish activity in line with the established trend.

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