West Texas Intermediate (WTI) also known as Crude Light (#CL) has been trading these days below the 200 EMA. The crude is in a consolidation phase due to the fact that major oil exporters agreed to begin increasing output rates to 4 million barrels per day. This could be accumulating global supply for a fall in the short term.
In addition, in light of this news, oil prices reacted negatively, falling to the low of 65.62, the area of the 2/8 Murray support. Now it is showing signs of being overbought, although the bullish force still prevails.
In the chart, we can see the formation of a technical pattern, Crude #CL, to break and consolidate below the SMA of 21 around 71.66. There could be a downward movement to the 4/8 murray around 68.75.
On the contrary, a consolidation above 72.18 may have a strong impulse towards the resistance zone of 73.44. At this level a downtrend channel converges.
Our recommendation is to sell below 71.66 with targets at 68.75, on the contrary to buy above 72.18 with targets at 73.44. The eagle indicator is showing a slightly bearish signal.
Support and Resistance Levels for July 27 - 28, 2021
Resistance (3) 73.56
Resistance (2) 72.87
Resistance (1) 72.47
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Support (1) 71.01
Support (2) 70.52
Support (3) 69.86
The material has been provided by InstaForex Company - www.instaforex.com