FX.co ★ CRUDE OIL: daily analysis for July 05, 2013

Daily chart: The CL continues forming a lower high pattern, above the support at 100.33 level. Remember that the next target of CL will be the resistance level of 103.85. However, we must consider the CL could make moves in low range for the session today, due to the extreme overbought which has occurred in recent days. The CL is maintained above the 200 day moving average and is very strong bullish trend, because the MACD indicator remains in positive territory and still shows no signs of overbought in the CL.

H4 chart: The CL is maintained below the resistance level at 102.01 forming a lower high pattern. If the CL manages to break this resistance, it is expected to rise to the level of 104.00. On the other hand, it is very possible that the CL fall back below the 100.00 psychological level, where there is a bullish trend line today. The CL is maintained above the 200 day moving average and the MACD indicator is negative and extreme overbought territory, so we must be cautious.

H1 chart: At current levels, a strong Point of Control (POC) has formed offering resistance on the CL and that has prevented it to climb back up to resistance at 102.15 level. If the CL manages to break this resistance, it is expected to rise to the level of 103.35. On the other hand, it is very possible that the CL undertake a bearish rebound at the POC and fall back to the support at 100.12 level. However, the outlook in the short term for the CL remains bullish, because the CL is maintained above the 200 day moving average. The MACD indicator remains in neutral territory.

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the Crude Oil pair breaks with a bullish candlestick, the resistance level is at 102.15, take profit is at 103.35, and stop loss is at 100.97.