Crude oil opened the week by reaching a high of around $104.73. However, it was unable to hold above the strong resistance level of $103.90 and quickly underwent a technical correction. It is now showing signs of exhaustion and could continue its fall in the coming days.
Crude oil is trading above the psychological level of $100 and above the 21 SMA, which suggests that a pullback toward the 8/8 Murray zone could be seen as an opportunity to open long positions with targets at $103.90. The instrument could even reach the upper band of the uptrend channel around $107.23, the high from late April.
Given that crude oil is struggling to continue rising, it could reach the $103.90 zone in the coming hours, which could be seen as an opportunity to sell with targets at $99.70 or around the psychological level of $100.
A decisive break below the uptrend channel could mark the start of a new bearish sequence for crude oil, and we could expect it to fall below $99.70 until reaching the 200 EMA around $94.95. The instrument could even reach the 7/8 Murray level around $87.50.
On the H4 chart, we can see that crude oil is forming a double top pattern, so we believe that as long as the price trades below $105.00, it could be seen as a signal to sell.