Tuesday, April 21, 2020

Support Test On Crude Oil

Marco Tosoni

FХ Strategist & Financial Commentator

During this first part of 2020, the bearish trend on oil is strongly accelerating, cause of the international lock down measures arranged after the spreading of the coronavirus. Anyway. Over the last 4 weeks, the black gold it seems to have built a bullish base around the major support area nearby $20 zone.

During yesterday’s session, Oil has further accelerated towards the yearly bottom, closing around 21.50 area with 7 bearish candles in a row.

Looking at the RSI indicator, we can see how the bullish divergence started in the end of February is currently extending and providing a bullish signal, that represents a last bounce chance before a possible breakdown of 20 dollars, with a potential target price around 15 dollars. While the average true range on the other hand is gradually returning to its average, as we already detected on the financial markets in general and this element could favour a short-term bounce and more stability on oil.

The setup would be activated in case of a comeback towards $ 25 area, around yesterday’s tops, the stop loss must be placed at 20, just below the yearly bottom. While the target price could be predicted at $30, where in the beginning of April an important resistance area was formed.

As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.

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