Crude oil spent nearly two full months oscillating between $56 and $62 per barrel and now, in two sessions, has declined to touch $50.58.
So where’s it going?
It has reached its next lower zone of support at 50.10 – 52.24 and has already begun to bounce.
This support zone was established over 3 months ago as a significant zone and following the breach of the 55.85 – 57.25 support zone, which held for weeks, traders in-the-know didn’t relent on selling crude until it hit this next lower support.
There is now a substantial zone of resistance left above at 58.60 – 60.80, which is not likely to be easily overcome on any rally attempt.
This leaves crude oil in a zone of rotation between support at 50.10 – 52.24 (with additional support below at 47.05 – 48.00) and resistance at 58.60 – 60.24.
There will be no reason to even think about crude oil prices going higher while the resistance zone at 58.60 – 60.80 remains intact.
The momentum in the short-term is to the downside but as prices have reached initial support, it’s not unlikely that crude will at least pause, bounce, or potentially begin a new range of rotation between the new support and resistance zones.
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