Oil is in a bullish channel but a strong 50% Fibonacci level could stop the trend from moving higher. The resistance level is a key decision zone for a bearish bounce or bullish breakout.
A bearish bounce could confirm the current wave pattern outlook, which is a wve 4 (pink) retracement within the downtrend. A bearish breakout below the support (blue) of the channel could send oil back lower (orange arrow). A bullish break above the 50% Fib however could indicate that a different wave pattern is more likely.
Oil is showing bullish momentum, but if the current wave outlook is correct, then this could be the final push higher as part of a wave 5 (blue) of wave C (purple) of wave 4 (pink). A break below the channel could indicate a change of price direction and take price back to the bottom of the larger channel.
Join Elite CurrenSea’sForex and CFD seminar in The Netherlands on February 16th.
Elite CurrenSea Training Program(s) should not be treated as a recommendation or a suggestion to buy or sell any security or the suitability of any investment strategy for Student. The purchase, sale, or advice regarding any security, other financial instrument or system can only be performed by a licensed Industry representative; such as, but not limited to a Broker/Dealer, Introducing Broker, FCM and/or Registered Investment Advisor. Neither Elite CurrenSea nor its representatives are licensed to make such advisements. Electronic active trading (trading) may put your capital at risk, hence all trading decisions are made at your own risk. Furthermore, trading may also involve a high volume & frequency of trading activity. Each trade generates a commission and the total daily commission on such a high volume of trading can be considerable. Trading accounts should be considered speculative in nature with the objective being to generate short-term profits. This activity may result in the loss of more than 100% of an investment, which is the sole responsibility of the client. Any trader should realise the operation of a margin account under various market conditions and review his or her investment objectives, financial resources and risk tolerances to determine whether margin trading is appropriate for them. The increased leverage which margin provides may heighten risk substantially, including the risk of loss in excess of 100% of an investment.