In the post from yesterday (see:Technical Analysis: Oil rockets higher on profit taking/short covering.), I outlined how the price of Crude Oil had risen 9% from the low. It was close to making a reversal day – taking out the prior day low, taking out the prior day high and closing higher – but that came up 7 cents short (69.52 vs 69.59). The 70.00 level was also a key level that needed to be broken as well. This is the underside of what was a nice lower trend line (it is 69.76 today).
Crude oil could not get back above the trend line. SO bears remain in control.
Well, the technical picture got close, but no cigar. The price could not push through the topside resistance levels. The bears remain in control and the price has rotated back lower.
The price is currently moving below the 38.2% of the trend move higher yesterday at the 67.31 level. The “will of the buyers” from yesterday is taking another hit. The 50% looms below and will be the final line in the sand for the buyers. There should be support buyers against the level on the test. IF they don’t show up, look for the sellers to reenter.
If the level can hold it is not “happy days are here again” for the buyers (like yesterday). Quite frankly, the price action is not so great today. However, it would at the least define a a more narrow trading range that has 66.63 as support and the topside trend line on the daily chart above as resistance (at 69.76 today and coming down). Traders can then battle it out. with risk defining levels.
Crude oil is below the 38.2% . If the buyers are to remain in control, staying above the 50% will be eyed.
PS. The moves in the Crude oil are taking the USDCAD on a ride. Yesterday, the CAD strengthened. Today, it is a different story.
USDCAD reacts to the price of oil.
