Oil range signals more weakness ahead as gaps remain unfilled

Gregor Horvat Wavetraders

As you know, on crude oil, we have been tracking corrective price action since the spike to 119 at the beginning of March. Despite breaking below the trendline support around 95 back on April 8th, the market managed to stabilize around 82, from where we are now seeing a new swing higher.

So rather than a sharp and impulsive drop in wave C, it now looks like this could be part of a more complex correction, with a triangle currently the most likely scenario. This is still a bearish pattern, but it allows the price to stay trapped in a wider range between roughly 118 and 80 for a bit longer. And so far we can see that market is coming lower as expected, ideally looking to fill the gaps from April 19th with d wave, maybe even will go for March 1st after whole triangle wave B is over, which suggests that this correction from 119 is not finished yet.

Recent developments also pressured oil lower, as optimism around a possible US-Iran deal reduced geopolitical fears. At the same time, OPEC+ announced a modest output increase for June, helping ease supply concerns and weighing on energy prices in the short term.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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