Oil in retreat with an eye on $80.00 levels, September low
- September was very bullish for the price of oil. After forming a low at 77.56 on August 23, the oil price has initiated a bullish consolidation.
Oil chart analysis
Today’s chart review will be on a four-hour time frame in order to give us a broader overview of USDWTI – oil movements in the previous period, and based on that, we will analyze the future potential trend.
September was very bullish for the price of oil. After forming a low at 77.56 on August 23, the oil price has initiated a bullish consolidation. We started September with the $80.00 level, only to stop at the $94.99 level. In that period, the price of oil jumped by 22.0%. We encounter resistance at the $95.00 level, and the price begins to pull back, making a bearish consolidation and losing support in the EMA50 moving average.
What happened to the price of oil?
In just 10 days, the price of oil fell to the $81.50 level, close to erasing all gains from September. Now, we see a consolidation around the $82.00 level, and we need a return above $84.00 in order to form a new bottom from which we start the continuation of the recovery. If we succeed in this, the next obstacle is the $85.00 level, the previous starting point of the bearish impulse.
A break above would further strengthen the price position for a further continuation to the bullish side. Potential higher targets are $86.00 and $87.00 levels. Additional resistance could be in the EMA50 moving average in the zone around the $87.00 level. It would be of great importance to us if we moved above him, so we could also get his support.
The inability of the oil price to sustain above the $82.00 level of support leads to the continuation of the retreat and the fall to the $80.00 level of support from the beginning of September. There would be an increase in bearish pressure on the oil price to test the previous low of August 23 at the $77.50 level.
