Written on 15/11/2021 by Theunis Kruger, FX Trainer at FXTM
Crude Oil on the D1 time frame has had a long bullish trend that lasted until 25th October when the last higher top was recorded at 84.95.
The market then broke through the 15 & 34 Simple Moving Averages and the Momentum Oscillator changed direction to the supply side, both indicating a likely downward shift in market momentum.
A possible critical support level formed when a bottom was recorded on 4th November at 77.57. Bulls joined the market and drove the price higher until reaching a resistance level on 10th November at 83.56. At that point the bears decided to take over the market again.
If the bears can gather more firepower to overwhelm the bulls and push it through the critical support level at 77.57, then three possible price targets can be projected from there. Attaching the Fibonacci tool to the last lower bottom at 77.57, and dragging it to the resistance level at 83.56, the following targets can be calculated. The first target can be estimated at 73.87 (161.8%). The second price target may be calculated at 67.88 (261.8%) and the third and final target may be expected at 58.19 (423.6%).
If the resistance level at 83.56 is broken, the above scenario is invalid and must be reconsidered.
As long as the market participants maintain a negative sentiment and supply overcomes demand, the outlook for Crude Oil on the D1 time frame will remain bearish.
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