USOil (WTI) Shifts Toward Bearish Trajectory

Market Analysis – May 10

The USOil market has undergone a notable bearish reversal as the daily chart depicts. This reversal became apparent after failing to breach the resistance level of 87.520 in April, marking a pivotal juncture in market dynamics. Notably, the most recent breach of the demand level at 81.160 has paved the way for a pronounced sell-off, signaling a shift towards bearish sentiment.

Key Levels for WTI:
Demand Levels: 76.940, 72.130, 69.660
Supply Levels: 81.160, 87.520, 94.530

USOil Long-Term Trend: Bearish

The positioning of the Williams Alligator below the daily candles at the beginning of the year signified a bullish trend, corroborated by the presence of a reverse head and shoulders pattern in the price action, further validating the upward trajectory. Additionally, the Stochastic indicator highlighted oversold conditions at the formation of the swing low of 69.130, prompting a reversal and subsequent ascent towards higher supply regions.

However, the bullish momentum encountered a notable obstacle in April, as the Stochastic indicator signaled overbought conditions. This development precipitated a downward price swerve, breaching the Williams Alligator and the bullish trendline, ultimately confirming a bearish reversal in market sentiment.

USOil Short-Term Trend: Bullish

The breach of the demand level at 81.160 marked the initiation of the downward trend, with the price subsequently testing the lower support zone of 79.940. Presently, this has prompted a bullish retracement, evident on the four-hour chart. The price is retracing towards a bearish order block, presenting a favorable opportunity for optimal short entries in the context of forex signals.

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