USOil (WTI) Maintains Stiff Resistance Amid Bearish Breakout and Consolidation

USOil (WTI) Market Analysis – May 31

USOil price experienced a notable bearish breakout, breaching the bullish trendline that had provided support for long orders at the beginning of May. Since this breakout, prices have oscillated within a narrow range, forming a consolidation pattern on the daily chart.

USOil (WTI) Key Levels

Demand Levels: 76.00, 71.40, 67.90
Supply Levels: 87.08, 93.20, 100.00

Long-term Trend: Bearish

The current bearish trend was anticipated in April when the Stochastic indicator revealed an overbought market condition. This was followed by the formation of a head and shoulders bearish reversal pattern, signaling a shift towards a bearish market. The transition was further confirmed as the Smoothed Heikin Ashi Candles turned red, indicating declining prices and the subsequent break of the supporting trendline.

Upon breaching the trendline, the price made a pullback for a retest. The retest was to further increase selling pressure for short orders.

USOil (WTI) Short-term Trend: Bearish

In the short term, USOil prices exhibit a volatile pattern. On the 4-hour chart, after the swing low of 76.50 was breached, the price surged to sweep the swing high of 80.00. This kind of price action is often indicative of stop runs, designed to trigger stop orders before the market resumes its prevailing trend. Traders should exercise patience and wait for a clear, steady movement to confirm the continuation of the bearish trend after this period of consolidation.

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