FX.co ★ Jackroay | CL/Crude Oil

I have been trading oil less frequently lately because I am still trying to determine the prevailing trend in the market. I previously analyzed oil seasonality, and based on that, I expected oil to show an upward trend from early spring to late autumn. I observed that oil indeed began to grow, although this growth started not at the end of winter as expected, but in early April. I noted that since April, oil has rebounded strongly from the low of 55.10 and is now trading around the 64.74 level. I analyzed the daily chart and saw that the price has reached the upper boundary of a long-standing southern price channel. I observed a long bullish candle on Friday, which confirmed growth to this resistance line. I expect a rebound from this resistance and anticipate a corrective pullback to the 63.00 area. I have already seen my previous forecast being fulfilled with price growth reaching this resistance. I now believe the market is poised for a short-term decline. I will be watching closely for a reversal confirmation from this resistance. I believe the daily price action is signaling that the market needs to cool down after a strong rally. I continue to see the technical setup aligning with a short opportunity.

I turned to the H4 chart for a more detailed view and found a northern wedge formation where oil has been trading. I observed that Friday’s session ended near 64.74, exactly at the resistance line of the wedge. I expect the price to bounce off this resistance and begin a decline, with the first bearish target at the wedge’s lower boundary, which currently intersects near 61.50–62.00. I believe there is a strong probability of a corrective move south starting from the market open on Monday. I am also monitoring key levels from the Monday options and weekly contract, especially 66.00, although I doubt we’ll see that tested unless oil breaks and holds above 65.31. I am also cautious of the nearby 65.50 level. I consider the 64.27–64.04 zone to be key intraday support, with the potential range for Monday’s action likely falling between 64.04 and 65.31. I acknowledge that it could stretch downward to 63.80 or upward to 65.50. I see the max pain level of the contract is at 64.00, suggesting a possible magnet effect with price dancing around that level. I believe any consolidation above this level may indicate the next directional breakout. I also cannot ignore that last week’s gap remains unfilled, which I view as a strong signal that still needs resolution. I anticipate a test of 65.20, where I have been watching for a sell setup. I expect a breakout above 65.00 may target 67.30, but I will only consider short entries from current levels. I am not interested in buying oil, as I expect cheaper prices in the longer term. I have marked 62.90, 61.65, and 59.50 as my key support targets for upcoming declines.