FX.co ★ Der | CL/Crude Oil

The WTI crude oil market is still trading in a technical framework of cautionary constructiveness and the price is on its way back to the 57.70 levels having taken time to stabilize above lows. In a more general sense, the market is also still in the medium-term consolidation period after the high selling off that was experienced earlier in the year. Although the longer-term movement still possesses bearish nature because the series of low highs in the past quarters, recent price action indicates the formation of a short-term recovery arrangement. Higher lows that are developed above a well-established demand zone characterize this recovery meaning that the selling pressure has been relieved and buyers are trying to recover. The range of values between 55.80 and 56.20 on the daily chart has been a vital support base. This area has taken in downside pressure numerous times and hence it has undergone several unsuccessful breakdowns. The capacity of price to remain above this zone provides an indication that there is a decline in bearish momentum and that the market is at a basing stage. Such conduct can usually be followed by either a corrective rebound or a general change of trend, depending upon the reaction of price to overhead resistance. The present upward progress towards 57.70 puts a price closer to a key near term resistance band of 57.80-58.50. This region matches previous consolidations and minor swing highs, and hence it is a technologically important resistance. Its significance is supported by the fact that this zone rejected me in earlier sessions. An extended daily close of more than 58.50 would be a structural enhancement which would be a new short-term bullish break out and would prepare the way to a further increase to the 60.00 psychological level. The 60.00 area is a significant technical obstacle, and it is a round-number area as well as a previous support that has turned into a resistance area. Any shift towards this field would probably cause a rush to the money and a greater volatility. A close that exceeds 60.00 on a daily closing basis would greatly enhance the medium term technical projection which may change the overall structure of the structure to one of bearish consolidation to neutral or perhaps a bullish bias. Negatively, the immediate support is currently found around 56.80-57.00 which is currently a short term pivot after hitting the rebound in the past two months. To hang above this would imply they are effectively protecting higher ground by buyers and pullbacks are all corrective. Any breach of this level would open price up to fresh downsides pressure at the better support level at 55.80-56.20. The recovery structure is valid as long as this lower support band does not break. Greater support exists at about 53.5054.00 which is the lower end of the wider range of consolidation. A shift towards this direction will be a sign of failure of the current rebound and reassert bearish dominance. The longer-term down trend would be supported by such a breakdown and indicate greater risk of eventual further declines to psychological support around 50.00. The trend structure analysis indicates that the latest candles are becoming stronger and better stabilized as every session developments consist of higher lows. Although the upside momentum remains middle-ground, no strong pusillation by bears indicates that sellers are no longer the masters of the game. The occurrence of this form of price behavior may be a sign of accumulation than distribution especially when it follows a long period of depreciation. The volatility is also starting to squeeze which indicates uncertainty and equilibrium between supply and demand. The current support and resistance levels are particularly valuable when there are big directional movements following periods of low volatility. The next phase of the medium term trend will depend on the direction the breakout of this consolidation will take. In general, WTI crude oil is trying to develop a short-term recovery in a larger consolidation framework. It is still anchored at vital support at 55.80-56.20 and a short-term limit at 57.80-58.50. A proven breakout at resistance would support the development of the price at an extension of 60.00 and a inability to sustain above short-term support would put the price at risk of a fresh decline. Until some form of decisive break, price will tend to stay within this range and traders will be keen on how the price reacts at these key technical levels to determine the direction of the next movement.