Crude Is Ready for Correction
Crude prices slightly declined on Wednesday morning as API reported crude reserves in the United States were up by 3.29 million barrels, which is above expectations of 2.23 million. The Energy Information Administration (EIA) will present official figures concerning reserves on Wednesday evening. The forecast is up from 1.857 million barrels to 428.9 million barrels in total.
This is a regular weekly data. The EIA data may provide an impulse for the correction of crude prices. Brent crude is within the upward trend with a current upside wave which started on August 23. Since then Brent crude prices are up by 30%.
If we consider crude prices on H2-H4 price charts, we may find that the rise since October 6 is accompanied by divergences. We may find three consecutive highs at $83.56, $84.56, $86.03 per barrel of Brent crude. And we would clearly find a divergence on any oscillator. If we connect lows on October 7 and October 13 than, together with the resistance lines, we will receive a reversal pattern “ascending wedge”. The downside exit from this pattern has already been executed. But for the moment, price is testing the former support as a new resistance level. If this pattern is confirmed Brent crude prices may return to $79-79.5 per barrel, making a correction of 6% from the current levels.
If Brent crude prices close on Wednesday to the downside, the reversal will be confirmed on the daily timeframe too. We would have a Tweezers candlestick pattern with confirmation. Intermediate support is located $81.40 per barrel where fast moving average EMA21 is on the daily timeframe chart.
In addition, I could add that if this “descending wedge” would be executed in full, then we may see a change to the current three-month upward trend.
This is a regular weekly data. The EIA data may provide an impulse for the correction of crude prices. Brent crude is within the upward trend with a current upside wave which started on August 23. Since then Brent crude prices are up by 30%.
If we consider crude prices on H2-H4 price charts, we may find that the rise since October 6 is accompanied by divergences. We may find three consecutive highs at $83.56, $84.56, $86.03 per barrel of Brent crude. And we would clearly find a divergence on any oscillator. If we connect lows on October 7 and October 13 than, together with the resistance lines, we will receive a reversal pattern “ascending wedge”. The downside exit from this pattern has already been executed. But for the moment, price is testing the former support as a new resistance level. If this pattern is confirmed Brent crude prices may return to $79-79.5 per barrel, making a correction of 6% from the current levels.
If Brent crude prices close on Wednesday to the downside, the reversal will be confirmed on the daily timeframe too. We would have a Tweezers candlestick pattern with confirmation. Intermediate support is located $81.40 per barrel where fast moving average EMA21 is on the daily timeframe chart.
In addition, I could add that if this “descending wedge” would be executed in full, then we may see a change to the current three-month upward trend.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.