Oil Trading At Channel Support – Price Action Analysis Update – 10th December
- CL, Jan13 (Light Sweet Crude Oil) is trading near channel support lows, following the recent pinbar price action rejection from range resistance and the psychological 90.00 round number area (see the figure 1 crude oil chart below). Oil prices had risen earlier in the week, but subsequently edged down.
- The weekly chart (fig 2) reveals a close near the candle low, adding bearish weight to the price action. Nonetheless, CL has held above channel support on the initial push lower and formed an inside day.
- A sustained break to the downside and extended inside day breakout scenario opens up a potential move to the 7/11/12 84.05 area lows. A successfull break below this point would take the the world’s most actively traded energy product into an area not hit in around 5-months.
- A sustained upside break brings the triple day low around 87.45 back into focus as potential resistance. If price can see an extended move higher the 90.00 handle and channel resistance remain as a key focus.
- The above comes as the dollar closed the week broadly stronger following an earlier move lower for the USDX. The USDX (dollar index) measures the value of the greenback versus a basket of currencies and closed the New York session on Friday at 80.42, up 23 pips on the week, after a prior drop of around 60 pips. The dollar index has formed a bullish outside week.
CL - Light Sweet Crude Oil (WTI) Futures - Fig 2
Crude Oil Price Action Analysis