Crude Oil Price Chart and Analysis:
- Crude oil hits support – will it hold?
- Oil looks heavily oversold in the short-term.
Crude Oil Slump
The price of a barrel of crude oil fell by over 12% last week as trade fears heightened, undermining global growth concerns. Oil also fell through noted support levels, including the 200-day moving average, which accelerated the move lower and took oil to a five-month low. We warned two-weeks ago that chart support looked weak with the 50% Fibonacci retracement level breached in subsequent days.
Oil has now bounced off the 61.8% Fibonacci retracement level and this may hold in the short-term, unless trade war rhetoric increases. The crude oil chart is also flashing an extreme oversold signal with the CCI indicator at once stage hitting -250, a level not seen since mid-December last year when the price of oil touched $50.0/bbl.
Support on the chart is seen at $60.63/bbl. – the previously mentioned Fibonacci retracement level –ahead of a cluster of highs/lows around the $59/bbl. area. Crude oil will need to consolidate around current levels, or higher, to start rebuilding some confidence in the market, which has fallen nearly 20% in less than six weeks. To the upside, the gap created on last Fridays (May 31) candle between $61.6/bbl. and $64.9/bbl. will be the bulls first target.