Emerging news about the underinvestment in the oil industry and very possible problems in keeping up with growing demand is a pro-growth factor for black gold. However, today’s near-term technical analysis points to the possibility of a downward correction.
- A bearish engulfment on the daily chart of WTI crude oil signals a possible correction of the recent increases
- In the further part of the article also invitation to participate in live analysis
WTI crude oil draws a bearish engulfing. Are we facing declines?
Crude oil is one of the most sought-after commodities. The two most popular types of oil are: Brent Crude and West Texas Intermediate (WTI). Oil prices are driven by market volatility and liquidity, as well as the fact that crude oil is an indicator of global economic activity.
Since the beginning of December, WTI crude oil has been moving in an upward trend. The price rose from 63 USD/b to 87.70 reaching the maximum of this year
The daily candles of 19 and 20 January formed an engulfing pattern, which suggests the possibility of stopping the growth and the beginning of a downward correction. MACD oscillator may confirm the downward scenario, the necessary condition will be the establishment of the maximum and entering the downward phase (change to red).
A downward divergence appeared on the H1 chart and the price is pushed towards the local trend line. If it is defeated, the declines may gain momentum and the price will push towards the nearest demand zone of 81.75.
The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
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