Crude Oil, #CL, is trading below the EMA of 200 and below the 6/8 of murray. Both levels act as strong resistance. If this level is broken, the price could reach the 7/8 zone of murray that coincides with the upper line of the bearish channel.
Crude oil is under downward pressure after the Agreement between Saudi Arabia and the United Arab Emirates. We believe that it will offer some consolation to market fears about an excessive increase in the price of crude oil.
In the chart, you can see the fall of crude oil of more than 1,000 points when it cost 76.00 and fell to 65.00. We believe that this could be a price range in the coming months. According the OPEC+ agreement, the cartal and its allies decided to increase the supply of oil by 400 thousand barrels per day (bpd) starting from August.
Therefore, for the month of August, the supply of crude may increase further, and there could be a downward movement towards the 65.00 support zone, which could keep crude oil under downward pressure.
According to the chart, we have drawn a downtrend channel. It is likely that crude will try to break this area. A pullback towards the top of the bearish channel at 73.20 will be a good selling opportunity. On the contrary, if the price consolidates below from the 200 EMA, there could be a correction to the 21 SMA (68.61)
Our recommendation is to sell below the 6/8 and the 200 EMA around 71.88. If high demand pushes the price towards the 73.20 resistance, we might consider selling at this level, targeting the 21 SMA, around 68.61 and at the strong support at 65.62 (2/8).
Support and Resistance Levels for July 23 - 26, 2021
Resistance (3) 74.01
Resistance (2) 73.35
Resistance (1) 72.47
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Support (1) 70.52
Support (2) 69.29
Support (3) 68.20
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Trading tip for Crude Oil #CL for July 23 - 26, 2021
Sell below 71.88 (EMA 200), with take profit at 68.61 (SMA 21) and 65.62, stop loss above 72.40.
Sell if pullback 73.20 (7/8), with take profit at 68.61 (SMA 21) and 65.62, stop loss above 73.60.
The material has been provided by InstaForex Company - www.instaforex.com