Crude prices continue to push lower, giving up all the gains from last week’s better than expected DOE implied demand and FOMC’s non-tapering event . It is clear that market is extremely bearish from the get go this week, with prices gaping lower on open this morning, sending prices below the key 105.5 level. Prices has recovered a little, but is still staying mostly under the 105.5 key support. Even a stronger than expected Chinese Manufacturing PMI  failed to inspire bulls to push higher, suggesting that the underlying bearishness is highly strong.
From a technical perspective, prices is facing additional bearish pressure from the descending trendline on top. Stochastic readings are pointing higher, but it is possible that readings may be able to reverse from the 20.0 level and lend affirmation to the 105.5 bearish breakout.
Weekly Chart is more bearish, with a bearish cycle signal formed coinciding with a re-entry back below 108.5 – 109.0 ceiling. Should the bearish cycle enters into full flight, we could easily see prices eventually hitting 100.0 or even sub 100.0 levels, but right now the immediate bearish target will be the 103.0 consolidation floor. Should Stoch levels manage to push below 60.0 coinciding with a 103.0 break, further bearish targets then can be contemplated.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.