Crude oil long-term projection

The future of oil looks bleak following the extension of the deal to cut production for nine months forward. Recent bullish build up mostly caused by rising tension between U.S and Iran also U.S and China. But it seems the bullish build up will lose momentum and start moving lower soon.

At the moment, traders have no reason to enter long positions in crude oil. A war between U.S and Iran is uninvited scenario but if it happens then crude oil might get a short-term boost.

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New Month

Monthly chart

Rejection from the trendline brought crude oil lower and test 61.8% Fibonacci retracement level. We now have a triangle pattern on the monthly chart. It seems the price will continue inside the triangle with SMA 200 as major resistance to watch. No clue yet on the next direction, traders could take the moment to trade the triangle range.

Weekly chart

Crude oil made upward movement since the bounce from 61.8% Fibonacci Retracement level. The upward movement stopped at the weekly SMA 200 and currently, we have a bearish candlestick in the making. No bearish confirmation yet as the candlestick has not closed yet. Traders will wait for the weekly close to determine if crude oil will turn lower or continue higher above WSMA 200.

Daily chart

On the daily chart, there is early confirmation for the bearish trend. The price rejected from daily SMA 200 and currently fall with strong momentum. If the bear could close the day below $57.60 then we get the confirmation. As long as there is no upward movement above the SMA 200 then crude oil will start falling.

Trade plan

The long-term trend of crude oil is sideways inside the triangle shown on the monthly chart. However, the bear slowly gaining the upper hand on the shorter time-frame. We might see a test on the bottom of the triangle again if we have further bearish close on the daily and weekly chart.

Traders could use the moment to trade the triangle range shown on the monthly chart. Use the bottom or the top of the triangle as a level to enter positions.