Oil prices are dropping today in response to Saudi Arabia cutting oil export prices to Asia to the lowest level in 27-month. We have written more about it in the earlier post. Oil managed to halt declines and bounce off the session lows slightly. Nevertheless, is still remain significantly lower on the day, with Brent (OIL) trading 3.9% lower at press time and WTI (OIL.WTI) plunging 5%.
Taking a look at OIL chart at H1 interval, we can see that price dropped below the $77 support zone, marked with 50% retracement of the upward move launched in mid-December 2023. This zone also acted as the lower limit of the trading range and a neckline of the double top pattern. Textbook range of a break below this neckline suggest a possibility of a drop to around $74 per barrel. However, declines were halted at the $75.50 support zone, marked with 61.8% retracement, at least for now.
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Create account Try a demo Download mobile app Download mobile appIf bears managed to regain control and push the price below $75.50 area, a move towards the aforementioned $74.00 would be the base case scenario. On the other hand, should bulls manage to defend the $75.50 area and price starts to recover, traders should look towards Fibonacci retracement levels are potential resistance.
Source; xStation5
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