OIL.WTI quotations in relation to the US dollar reached a nearly 16-dollar drop from the peak at USD 66.57, and the bottom of the sell-off was established during Wednesday’s session, after testing the key support at USD 51.30.
As can be seen from the daily graph below, on its way to the south, the oil price overcame three significant supports, only slightly correcting the downward impulses. Yesterday, however, an inside bar pattern was formed where the daily candle is entirely within the range of the previous day’s quotes.
The direction in which the inside bar is broken can be important. If it turns out that the session will close above the maximum of the mother candle (USD 53.38), the price may start a deeper correction. The closest resistance in this scenario is nearly USD 55.40, and this level worked well as an S/R from January to March 2019.
Alternatively, a slump to 50.58 at the close of the day would indicate a break in support and open the way to the next level of defence at 47.52 USD.
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