The USOil market recently delivered an impressive, impulsive move, breaking out of its bearish channel in September. The test of the bearish order block at 78.00 triggered an influx of sellers, leading to significant short positions in the market. Following this breakout, USOil retraced to the swing low at 71.610 for a retest.
USOil’s bearish trend remains intact, with the recent break of structure below the swing low at 71.610 reinforcing the downtrend. However, the price decline paused as the Stochastic indicator revealed oversold market conditions, prompting the formation of a swing low at 65.650, followed by a bullish retracement.
An unmitigated bearish order block rests at 72.910. Just below this order block, a fair value gap exists on the daily chart, representing market inefficiency. The bullish retracement currently targets this gap to restore market balance, with sellers preparing for action as the Stochastic indicator nears the overbought zone.
USOIL Short-term Trend: Bullish
Although the higher time frame trend is bearish, the 4-hour chart presents a bullish short-term trend. For optimal trade entries, traders should use forex signals that wait for a realignment of both trends. A Change of Character (ChoCh) near the higher timeframe’s bearish order block at 72.910 would provide a strong signal for short positions, targeting the previous swing low at 65.650.
Note: Learn2.trade is not a financial advisor. Do your research before investing your funds in any financial asset, product, or event. We are not responsible for your investment results.
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