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Crude oil is trading around $87.40 with a bearish bias, below the 21-day SMA and the 200-day EMA, and within a downtrend channel that has been forming since April 7
Crude oil has been consolidating above $87.50 per barrel over the past few days. On several occasions, oil has rebounded above this zone. If consolidation occurs below $87, we could expect a continuation of the downward movement.
If crude oil continues to fall and consolidates below the 7/8 Murray level, we could sell with targets at $80, and ultimately at the 6/8 Murray level around $75 per barrel.
Conversely, if crude consolidates above $89.30—where the 200 EMA is located—and decisively breaks the downtrend channel formed since April 7, this could be seen as a signal to buy above the psychological $90 level, with a target at 8/8 Murray around $100. WTI is even expected to reach +1/8 Murray around $112.
The Eagle indicator has reached oversold levels, and a technical rebound is likely to occur around this area. Above $87.50, we could look for opportunities to open long positions.
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