The bearish trend in USOil commenced after the bullish order block at 80.00 failed to hold. This led to a reaccumulation phase within the 80.00 to 75.00 range throughout May. The emergence of three black crows following a Judas swing pattern signaled the resumption of the downtrend, confirmed by a bearish break of structure.
USOil Key Levels:
Demand Levels: 74.00, 71.40, 69.30
Supply Levels: 80.30, 84.40, 87.60
USOil Long-Term Trend: Bearish
In April, the formation of a head and shoulders pattern indicated a bearish reversal. This was further confirmed as the 30-period moving average crossed below the 50-period moving average. The connection of lower highs on the daily chart aids in predicting future price pullbacks. The bearish trend experienced a temporary pause in May due to market consolidation. However, the trend resumed in June with the appearance of three black crows.
After reaching 73.00, the price experienced a retracement, currently reaching the 85% level on the Fibonacci retracement, placing it in the premium range of the last bearish displacement. A swing high has formed in this range as the price tested the bearish trendline.
USOil Short-Term Trend: Bullish
On the 4-hour chart, the price trend appears bullish. This retracement on the daily chart translates to a bullish trend on the lower timeframe. A head and shoulders pattern has formed within the premium zone, potentially preceding a bearish reversal to continue the overall downtrend. The price is expected to break below the previous low of 72.60 upon the resumption of the downward trend.
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