Forex Technical Update
WTI Crude Oil daily 5/4/2012
After the failed attempt to break above a declining trendline, WTI crude oil fell sharply. In 3 daily candles the market wiped out gains since almost 3 weekly sessions ago. The daily chart shows the latest daily candle sliding below a rising trendline. This strong breakout suggests there is further correction to WTI crude oil's rally since Oct. 2011 from just below 75 to just under 110.
The RSI has been stuck between 60 and 40, reflecting consolidation momentum. If the reading falls below 40, it would reflect the loss of bullish momentum from the rally since Oct 2011. The 100 psychological handle will be an important level to push under for this reversal outlook. Under 100, we first look at the 200-day simple moving average which is also coincident with the support pivot from the beginning fo Feb. 2012, around 96.00.
If the reaction after the Non-Farm Payroll can push below the 100.50 pivot, the bearish outlook opens up (with 100 as key level to monitor as well). However, a push back above 103.70, would shelve the bearish outlook and suggest a bullish market.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.