The market wide positive risk appetite this morning drove WTI Crude higher as traders believed that the record aggregate financing figure released by the Chinese Central Bank meant that we should see higher demand for commodities. However, despite all the strong efforts by the bulls, we were not able to surpass last week’s high, with prices coming extremely close at 101.351 today versus the 101.352 high seen on 12th Feb.
The failure to even match previous high drove prices lower, but we’ve seen recovered and currently that is yet another attempt to tag 101.352 once again, but the highest we’ve seen right now is 101.33, making this an even worse attempt than before. There is no evidence that the testing has stopped, hence it is still possible for further bullish endeavours to continue, but should current test ultimately fail, we could see a stronger bearish rejection that may even bring us below this morning’s opening levels.
The resistance around 101.35 can be extended to show added significance historically. This adds strength to the resistance and increases the likelihood of prices pulling back from here. However, given that we have traded above the previous swing high seen on Dec 28th, we’ve impaired the long-term downtrend and more may be coming for current bullish leg that started in mid Jan. Therefore, even though a pullback is likely from here, expect rising trendline to put up a decent support against any sell-off especially since current trendline levels is around the consolidation zone seen last week.
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