During Wednesday’s trading session, crude oil found a fresh high at $59.90. After the Crude Oil inventories data release, USOil bosted to its highest level for four weeks. In this post, we’ll review what to expect from USOil for the following weeks.
The big picture
Crude Oil (USOil) is running bullish inside of a corrective sequence. The potential three waves movement could drive to the price to test the previous low at $42.40. The RSI oscillator is testing the $60 level; this represents a resistance level in a bearish trend. Considering this context, our critical level for a second bearish leg is at $63.75. This level corresponds to our invalidation level.
The potential next path
The USOil 2-hour chart shows the short-term bullish sequence, which calls for a marginal upside to the area between $60.50 and $62.40. Once the price tests this exhaustion zone, we expect a continuation of the long-term bearish trend. The bearish divergence on RSI, support the exhaustion of the upward momentum developed.
The short-term target for the bearish scenario is between $48.87 and $45.39. The invalidation level is for the price to close above $63.75.
Remember that the price is not compelled to move as our forecast proposes. The charts released corresponds to the Elliott Wave Theory application.