USOil Price Surges Within Parallel Channel

Market Analysis – August 23

The USOil price has shown sensitivity to a downward parallel channel on the daily chart. After testing the channel’s lower boundary, the price has reversed direction, initiating an upward movement.

USOil Key Levels

Demand Levels: 72.40, 69.30, 67.70
Supply Levels: 80.20, 86.50, 89.80

USOil Long-term Trend: Bearish

Before the recent test of the lower boundary, the USOil index briefly surged above the previous swing high in what appeared to be a Judas swing. This false breakout likely aimed to trigger long orders before resuming the bearish trend.

The parallel channel continues to guide the market, offering key resistance and support levels. During the recent test of the channel’s lower boundary, the Stochastic indicator signaled an oversold condition, indicating selling exhaustion. This signal, combined with bullish price action the following day, supports the notion of a short-term recovery. The Bollinger Bands also played a crucial role, with the lower band providing additional support at the point where the channel was tested, further confirming the price rebound.

USOil Short-term Trend: Bearish

The price has begun ascending from the lower boundary of the channel. In this context, targeting the midrange of the channel appears prudent, especially for traders looking to take partial profits around this level. Additionally, a Change of Character (ChoCh) has emerged on the 4-hour timeframe, offering a safer entry point. A potential target for this upward move lies around the 80.20 level, the site of the previous high. Traders may benefit from using forex signals to identify optimal entry points as the price ascends within the channel.

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