During yesterday's session we mentioned an interesting technical situation on the crude oil market. Looking at the OIL.WTI chart, the price tested the $79.10-$80.00 resistance zone as we expected. However according to the Overbalance methodology, as long as price sits below this zone, another downward impulse may be launched. Nevertheless, the price reaction has been limited at the time being, which makes the situation not entirely clear. On one hand, a break below the EMA100 (green line) could lead to an acceleration of the downward move. On the other hand, consolidation at the current levels raises odds of a potential move towards $80.0 mark, which would change main sentiment to bullish. Either way, price is currently trading around the key resistance zone and a breakout may occur shortly. Currently, market sentiment may be affected by information from China (regarding protests related to pandemic restrictions) and OPEC+ decisions regarding further production cuts. Today the cartel announced that Sunday's meeting will be held virtually. Some may perceive this as a sign that OPEC will carry on with current policy and no major decision will be made. However it is worth remembering that the biggest production cut was announced during a virtual meeting in 2020.
OIL.WTI interval H1. Source: xStation5
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