Weekly chart
The weekly chart for Thursday gives us a broader picture of what is happening with crude oil at this moment.
As it can be seen, the price is at 109.46 above its weekly Resistance 1. It crossed the downward trendline, which lies through the area. It is also snuggles line +1/8 after it almost touched line +2/8 considered as an extreme zone of contribution.
In normal market conditions this could be indication of a reversal, but taking in mind the global situation it is likely that the price will extend around 118 or 119 in the coming days.
We, therefore, suggest just keep buying positions with very tight stop loss due to the high volatility.
Daily chart
After a climb over 300 pips within eight hours and the reach of a high of $112.22 per barrel, crude oil fell almost 80% to settle at the line 6/8 (red line). In this case the resistance has become an important support zone, which can easily take it back to a new high around $118 a barrel.
This is because worries about possible intervention by the U.S. to the Middle East have intensified. Technically, we can not rule out a possible decline in prices, but this scenario is unlikely because of the global political stage.
4-hour chart
After a climb over 300 pips over eight hours crude oil is approaching 109.42 with possible continuation of the upward trend that could reach $115 or $118 a barrel.
An opposite scenario will be limited not only by the line 6/8 as it was mentioned, which can become a point of support, but also by the line 5/8 (green line), which used to be the top line of our range and now it will be an area of support to consider also converging with the trendline.
If you have any questions or suggestions, please contact me right through:
Email: antonio.inga@analytics.instaforex.com