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Crude Oil: Bears Have Fresh Targets

By Satendra SinghCommoditiesAug 08, 2022 03:48AM ET
Crude Oil: Bears Have Fresh Targets
By Satendra Singh   |  Aug 08, 2022 03:48AM ET
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Every country was urgently buying oil urgently after Russia invaded Ukraine. But now prevailing recessionary fears, due to a sudden surge in food prices along with steep increases in inflation is complicating the global economic situation.

Since April 2022, crude oil continued an uptrend from $92 and finally hit a high at $123.75 in June, but soon this bullish rally turned into a slide and it could continue this week.

Oil breached its long-term support of $92 during the downward. The current slide could turn steeper during the upcoming week if the price breaks $87, as the support of $92 has turned into an immediate resistance.

On Friday, oil rose from the lows of $87.01 to turn positive on the day after the release of the job numbers as dip-buying emerged after the cumulative drop of more than 6% in the two previous days of trading.

Friday's low of $87.03 was a bottom not seen since February 1, when it went to as low as $86.55. But for this week and month, WTI is about 10% in the red after a fall of more than 7% in July and June.

WTI had never forayed below $90 since the Russian invasion of Ukraine, which saw a litany of sanctions imposed on Russian energy exports that sent a barrel of U.S. crude to as high as $130 by March 7.

WTI Crude Oil Futures Monthly Chart
WTI Crude Oil Futures Monthly Chart

Technically speaking, in the monthly chart, oil is showing a steep fall that may continue as the formation of three consecutive bearish monthly candles (including of August) shows extreme exhaustion. In the first week of August, monthly candle has breached 9 DMA support, currently at $96.46.

WTI Crude Oil Futures Weekly Chart
WTI Crude Oil Futures Weekly Chart

In the weekly chart, oil is constantly facing stiff resistance at 9 DMA after a bearish crossover formation in the weekly chart that could lead to a steep fall in crude price up to the upper band of the 'Ichimoku Clouds' currently at $78.41.

Undoubtedly a fall below $76 could drag down the price to hit 200 DMA, currently at $62.32.

Disclaimer: The author of this analysis does not have any position in WTI Crude Oil futures. Readers are advised to take any position at their own risk; as Crude Oil is one of the most liquid commodities of the world.

Crude Oil: Bears Have Fresh Targets

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Crude Oil: Bears Have Fresh Targets

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