Commodities Market Analysis – US Oil

*Live market analysis of US Oil price!*

Another live market analysis blog post to show you where I think the price of US Oil will go in the next few days & weeks. Let’s get straight in to it with the higher timeframe weekly price chart.

US Oil weekly timeframe chart

At the end of last year we saw the break of the weekly bullish trendline that started back in 2016 and this was a major move for the price of US Oil. Since then we saw price reach lows of nearly $42 per barrel before pulling back to retest the broken TL (see below circles).

The break and retest of the trendline is always good sign of the trend reversing and that short positions on side with this higher timeframe may prove to be rewarding. Price is now making a sort of wedge pattern on the weekly timeframe and I believe this is price pausing and consolidating before it breaks to the downside once more.

Let’s look at the daily timeframe chart for the near term trend analysis.

US Oil daily timeframe chart

As always, I try to keep it simple and use the fibonacci retracement tool and my brain to spot the prevailing trend. On the daily timeframe I saw 3 nice wick rejections of the 0.618 daily fibonacci retracement level which is a nice sign of the level holding and a potential reversal occurring. This would coincide with a weekly lower high inside the wedge pattern I discussed. Wedges/triangles are difficult to trade because they can sometimes chop back and forth for longer than expected and make even the sturdiest of traders become frustrated.

None the less, these daily wick rejections of this level and the weekly chart price action gave me enough confidence to enter a fairly conservative short position at $60.20 per barrel.

The daily chart below shows the short position with SL and profit target.

US Oil daily timeframe chart
(with short position)

My stop loss is placed nice and wide and way above the wick rejections of the daily 0.618 fibonacci retracement level. This means if there are any more retests of this resistance zone then I should be safe.

For the moment, my profit target is not set and I will manually look for exit opportunities when they present themselves. I have the extended “lower low” target set on the chart above.

Now let’s look at the lower timeframe 1hr chart and I will show you what I think US Oil price might do in the near term.

US Oil 1 hour timeframe chart

As you can see, there was strong bearish momentum yesterday which allowed price to finally break the 1hr 50 ema again. This also produced a nice bearish engulfing daily candle closure.

In my opinion, I think price will now work its way downward to the next daily/4hr support zone at $56.50 per barrel. I will look for lower lows and small pullbacks that retest the 1hr 50 ema and intraday support/resistance zones because these might provide good scale in positions entries.

If you haven’t done so already then I highly recommend you read my previous blog post on intraday support and resistance zones. You can get to it by clicking on the link below.

https://diaryofafinancekid.com/2019/06/25/intraday-support-and-resistance-zones/

If price makes it to this next support zone then I think there will be some more consolidation or an extended pullback before price breaks down again to make new daily lows. This is why I am leaving my target profit open for expansion as the trade evolves.

As always I have put this analysis on the TradingView platform and you can find it by clicking on the link below.

https://tradingview.go2cloud.org/SH3bP

So there we have it, that’s my view on the price of US Oil over the next few days and weeks. Thanks for reading! 🙂

DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

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