Crude Oil on the H4 time frame was in an uptrend until a lower top was reached on 6 May at 110.01. After the lower top, strong bearish candles indicated a possible shift in momentum as the price broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator sliced through the baseline with bearish terrain. A possible critical support level formed when a lower bottom was reached on 10 May 99.38.
The bulls then tried to muster their strength but failed and a resistance level was reached later in the same session at 103.07.
Crude Oil managed to break through the critical support level at 99.38 and three possible price targets were considered from there. Attaching the Fibonacci tool to the bottom at 99.38 and dragging it to the top of the resistance level at 103.07, the following targets were calculated. The first target was estimated at 97.10 (161.8%) and crude prices almost touched it. The second price target was forecasted at 93.41 (261.8%) and the third and final target can be anticipated at 87.44 (423.6%).
If the resistance level at 103.07 is broken, the above scenario is no longer valid and risk management is paramount. As long as the bears continue to rule with supply overcoming demand and the resulting downtrend structure of lower tops and bottoms, the outlook for the Crude Oil on the H4 time frame will remain bearish.
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