USOil Pulls Back to Fair Value Gap

Market Analysis – September 14

The USOil market has continued its decline since July, with three consecutive falling peaks initiating the downward movement from a high of 84.490 to a low of 65.650. The price is now retracing towards the resistance zone at 71.610, signaling a potential test of this critical level. Market participants are closely watching this zone for signs of a possible continuation of the bearish trend.

USOil Key Levels

Demand Levels: 65.650, 63.610, 60.000
Supply Levels: 80.130, 84.490, 87.600

USOil Long-Term Trend: Bearish

The long-term outlook for the USOil market remains bearish, as confirmed by technical indicators. The Smoothed Heikin Ashi candles have effectively filtered out market noise during the ongoing decline. Throughout this bearish trend, even during periods of significant bullish retracement, the candles have remained red, signaling that the overall market sentiment continues to favor sellers.
In August, USOil saw three brief bullish surges. However, these failed to alter the broader bearish momentum.

The USOil price broke early from a newly formed descending channel, bypassing the typical third test of the lower trendline. The Hull Butterfly indicator, which reached a low of -10, signaled increasing selling pressure before showing potential signs of exhaustion with a green point.

USOil Short-Term Trend: Bearish

After testing the 78.00 resistance zone in late August, the market resumed its downward trajectory.
In the short term, the 4-hour chart continues to display a bearish market structure. The Volume indicator shows a consistent pattern of longer volume bars accompanying bearish (red) candles. This suggests stronger selling pressure during impulsive moves, compared to the shorter volume bars seen during bullish corrections.
The current bullish pullback toward 71.610 is expected to meet resistance at this key level. Should this pullback lose momentum and fail to break through the zone, sellers may regain control, driving the price lower toward demand levels of 65.650 and below. Traders monitoring forex signals may find potential entry points around these levels.

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