Crude oil futures was another commodity which sold off sharply yesterday, largely driven by dollar strength with the March contract ending the session with a wide spread down candle, closing at 94.46 per barrel and breaching a key support region at the same time in the 95 area. This bearish sentiment followed an extended period of sideways congestion where oil attempted to breach the 98.25 price zone defined by the yellow line, with several failed attempts, before finally breaking lower in yesterday’s trading session and moving away from the current congestion region.
Yesterday’s low also tested the next platform of support in the 94 per barrel region and should this hold then we may see a further run to test the defined resistance as outlined above. Today also sees the release of the weekly oil stats (delayed as a result of the President’s Day Holiday on Monday), so expect to see even more volatility.
Moving to the indicators, the daily heat map remains bullish whilst the only negative sentiment appears to be on the daily volumes with sellers now moving into the market. The three day trend remains bullish as does the volume and the key now is whether the 94 price region now manages to contain the current temporary slump.
By Anna Coulling
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