The price of WTI finally broke out of of quite a flat consolidation within which lasted more than two weeks. Consolidation initially took the form of a triangle but after a failed attempt to break the resistance level at 51.50, which took place last week, it was transformed into a channel. In the end support at round level 50.00 was also broken and candle (visible on the H4) which has made this leaves no doubt that bears took over control.
Currently the key level of support is in the area of 49.15 – 49.00. At this level support coincides with the abolition of fibo 38.2% of the previous upward movement. If this level is broken it will trigger a deeper correction. Further support are positioned at levels: 47.70, 46.50, 44.50, 43.00. Depending on the power of bears of each of the levels can be tested. However, as can be seen in the D1 chart below level of 46.50 currently coincides with the bullishtrend line and therefore it is here where bulls will attempt to regain control.
Alternatively (it is now less likely scenario), if the level of 49.00 is not broken and it would cause a strong rebound after breaking the resistance level at 50.00 the price of oil will quickly reach the level of 51.50 and this time this resistance can be overcome as expected correction has already been filled with test of level of 49.00.