- Very downtrend line.
- EMA activity remains bearish.
- Dynamic support can be broken.
Oil prices continue to plunge, despite reporting consistent draws in US oil inventories results. What’s more, raw materials technicians are indicating that it may have some downside potential even more in store for the coming weeks. It should be noted that the development of the trendline and highly imminent change of direction in the MME 100 days could mean losses for prolonged merchandise.
First, as evidenced by the H4 chart, oil is developing increasingly robust trendline. This trend has remained strong since the merchandise initially began to decline and has resisted multiple attempts to break higher. As a result, if oil should decide gather as the week comes to an end, it would be very irregular even if he managed to get out.
The drop of oil has been exacerbated by the increasingly pessimistic nature of its activity EMA in the last number of weeks. The graph H4 for example, 12, 20 and 100 period EMA have been relentlessly bearish since the fall that occurred following the double top that was formed in early July. What’s more, while on 12 and 20 EMA have been bearish for some time, 100 days is starting to take a downward turn.
Importantly, the EMA 100 days was actually a source of dynamic support of oil and raw materials in case of break of this support, you could use the dryer significantly. As shown on the daily chart, the oil is coming dangerously close to breaking the support provided by the EMA 100 days. In addition, now that the oscillator CCI has moved out of oversold territory, support around the 44.40 level will weaken dramatically.
In addition to the activity of EMA and ITC, the Parabolic SAR readings are still signaling that the product is in the midst of a downward trend full blown. As a result, it now seems likely that 43.96 and 43.01 support areas could be next levels to be seriously challenged. These areas are looking both relatively firm, however, if a crossing occurs day EMA 100 still could break.
Ultimately, the embattled merchandise is having some difficulty gaining much traction and most of its sudden price increases are being erased in subsequent sessions. In its current trajectory, oil could be as low as $ 43 from the end of the month and could go even lower. However, keep an eye on inventories of the results of the United States, as they are likely to give some temporary increases in commodity prices as it descends to the products.