West Texas Intermediate (WTI) inched lower on Wednesday, dragging the price of crude oil to less than $43 a barrel as sellers continue dominating prices. The technical bias remains bearish because of a Lower Low in the ongoing downside wave. The price of crude oil has been moving in a downward slope channel. The US Central Bank is due to announce its monetary policy today.
As of this writing, WTI is being traded near $42.91 a barrel. A hurdle may be noted near $43.49, the horizontal resistance area ahead of $44.80 which is the confluence of a trendline resistance as well as the horizontal resistance levels. A break and daily closing above the $44.80 resistance area might incite a renewed buying interest, validating a rally towards the $52.06, the high of the latest major upside rally.
On the downside, the price of crude oil is likely to find a support near $42.55, the horizontal support. A break and daily closing below the $42.55 support area will open doors for deeper correction towards the $40.00 milestone. The technical bias will remain bearish as long as the $50.27 resistance area is intact.
Fundamental outlook for crude oil remains positive as the recent Brexit vote in Britian has put the interest rate hike by Federal Reserve off the table for at least next few months. The Federal Reserve will announce its interest rate decision today. Not to mention a surprise rate hike by the Central Bank may cause strong selling pressure in the price of crude oil.
Considering the overall technical outlook, buying Crude Oil upon the emergence of a valid bullish reversal candle appears to be a good strategy in short to medium term.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT