As the chart shows, US Crude Oil fell below USD 78 yesterday for the first time since July 25. This was facilitated by:
→ fears of a crisis that could follow from the collapse of the Chinese property developer Evergrande;
→ alarming PMI data from different economies. Japan reported a contraction in manufacturing activity for the third month in a row. Business activity in the euro area also fell more than expected, especially in Germany. Business activity in the US in August approached the point of stagnation, while growth was the weakest since February.
→ The market has been bullish since July. And the current rollback from the top of July is just a correction.
→ The price of WTI Crude may find support from the lower border of the rising channel, as well as from the level of USD 78.50, from which the price has already formed bullish reversals in August.
→ The level of USD 74 looks like a reliable support.
→ The USD 83 level has served as strong resistance throughout the year. This may be due to the fact that increasing the price above is not beneficial for governments and central banks that are fighting inflation.
→ A candle with a long upper shadow on August 21 (followed by 2 more bearish candles) indicates bearish activity.
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