USOil (WTI) Prepares For Potential Breakdown Below Key Support Zone

Market Analysis – May 16

USOil is setting up for a potential breakdown below a critical support zone. The current daily chart indicates a growing bearish momentum, as reflected by the technical indicators. The 9-day simple moving average (SMA) is trending slightly downward and recently acted as dynamic resistance near the $61.80 level. The Stochastic Oscillator is hovering near the overbought region, with the %K line at 74.82 and the %D line at 68.54, suggesting bullish momentum may be waning. A crossover from this zone could signal renewed selling pressure in the market, reinforcing a short-term bearish outlook.

USOil Key Levels

Resistance Levels: $65.30, $72.20, $80.70
Support Levels: $61.80, $55.20, $52.00

USOil Long-Term Trend: Bearish

USOil recently tested a previous swing high at $63.70, only to face sharp rejection. This occurred just below the horizontal resistance near $65.30, underscoring its significance. Candle patterns in this region suggest supply is outweighing demand. Moreover, the failure to break above the $72.20 order block further confirms that buyers are losing steam. The formation of lower highs on the chart is a clear sign that bearish forces are regaining control.

Looking ahead, if price continues to be rejected below the $63.70 mark and cannot reclaim $65.30, a further decline appears likely. The next significant support lies around $55.20, and a break beneath this level could lead to a move toward the $52.00 zone. This outlook, commonly highlighted in professional forex signals, suggests a retest of the $61.00 SMA could serve as a trigger for further downside movement. If selling pressure intensifies, a swift move toward $55.20 may unfold, fueled by stronger bearish momentum and a possible shift in market sentiment.

USOil Short-Term Trend: Bearish

USOil is experiencing rejection at the $63.70 level after drawing in buy-side liquidity near a bearish order block. The price is now trading below the 9-period SMA at $61.30, pointing to diminishing bullish strength.
The Stochastic Oscillator is beginning to turn downward from the 30 zone, indicating ongoing bearish pressure. If the price fails to reclaim $61.80, a move toward the $55.20 support area remains a probable scenario.

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