USOIL (WTI) Sees a Notable Bullish Retracement

Market Analysis – October 6

The USOIL index recently experienced a significant shift in its bearish structure on the daily timeframe, highlighting a change in market sentiment. This shift occurred after a major low was established in early September 2024. The price, initially reaching a peak at 84.500, began to decline, forming a bearish trend line as it moved through the 72.000 demand zone. This trend showed strong downward momentum, resulting in sustained selling pressure.

USOIL Key Levels

Demand Levels: 72.000, 65.000
Supply Levels: 80.000, 84.500

USOIL Long-Term Trend: Bearish

The long-term trend remains predominantly bearish, as USOIL’s price action confirmed the downtrend by breaking through the critical 72.000 support level. However, the decline halted as the price found temporary support around the 65.000 region, triggering a bullish retracement. This rejection at the 65.000 level was further validated by a bullish breach of the descending trend line, indicating buyers regaining some control.

The break above the trend line resistance suggests a short-term shift in market trend, with the price now trading above the Moving Average, signaling a bullish retracement phase. The daily Relative Strength Index (RSI) supports this view, showing increasing bullish momentum. Despite these signs, this bullish movement is seen as a corrective phase within the overall bearish outlook. Unless the USOil price establishes a higher low or breaks above key supply levels, the long-term trend remains bearish.

USOIL Short-Term Trend: Bullish

In the shorter term, the recent bullish reversal is more evident. The break of the trend line has resulted in a series of higher highs, indicating a shift in sentiment over the past few weeks. However, this bullish momentum appears to be weakening as the 4-hour RSI nears overbought levels, suggesting a potential short-term bearish pullback.
The expected retracement is likely to be temporary, as the price could find support within a 4-hour order block before resuming its bullish advance. It’s important to note that while the short-term momentum may be bullish, it is anticipated to be capped at the 80.000 supply level, in line with the broader bearish trend. Traders using forex signals should monitor these levels for potential opportunities.

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