A number of scenarios were proposed for crude’s movement, yet the barrier in defining the direction remains the $60 levels. This psychological barrier offers a wide trading range for oil, where we can see on the chart below that it managed to finish 38.2% correction for the steep downside around 78.00 and even managed to extend into 80 levels before resuming the decline.
At first sight, we can see that trading was within the upside channel that was breached in the last trading month of 2009 which ignited negativity in direction and led crude to correct around 23.6% of the upside wave. At the same time, we can see that the downside wave has slowed noticeably after reaching the mentioned correction level around 71.00 and after slightly falling below 70 levels it managed to acquire new upside momentum. ADX is trying to point to the downside yet was incapable of confirm the direction while RSI reverse to the upside.
