Oil continues its beautiful downswing

Tomasz Wiśniewski

Chief analyst at Alpari Research & Analysis

This week we will start by analysing WTI Oil, which was previously mentioned here on Friday. Has much changed since then? Not really, but we would like to describe the current situation in greater detail.

The mid-term chart here is beautiful and the price has created a good-looking downtrend. Why is it beautiful? Because it has been around since the 3rd of October, and the price has been moving very technically ever since. Traders have been following the main downtrend (red) with great precision. What is more, every single correction so far (blue) has been a technical pattern! First, we had a pennant, then a rectangle and a flag. The last one, and also the smallest one, was a flag too. All of them ended in the breakouts of the lower lines. On Thursday, WTI managed to break the horizontal support at 64 USD/bbl (green, important in June and August). On Friday, sellers managed to break the 38.2% Fibonacci.

All of this negative sentiment is keeping the sell signal alive. Monday started with a small rise but this is not technically significant. Negative sentiment will remain intact as long as we stay below the green and red lines.

 

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