CFD News – Could Oil Sellers be Starting a New Breakout?

August 1, 2022
by Joseph Jeffriess, Market Analyst

Thanks for stopping by for Monday’s update. Today’s focus is on oil’s daily chart as sellers have made an aggressive move and have started to confirm a pattern breakout.

Looking at the overall trend structure, we can see a LH has formed just before sellers broke the long-term uptrend. Since that break, we have seen a series of LHs and LLs showing a normal pattern of trend since the last LL price formed a series of points that formed a triangle/wedge pattern.

Since this pattern is in an established downtrend, we will look for the pattern to become a continuation pattern if sellers can confirm a new lower breakout. As shown in the chart below, we can see that today’s price action has started to form a new breakout, but we still need to see sellers confirm with a solid close lower.

The issue sellers could face is seen lower at the two levels of support/demand. If we do see the price move lower, we will be watching to see if sellers can clear those two levels. At that stage, it will be quite clear that a new continuation is underway and that price is resuming its current downtrend.

If buyers reverse today’s selling and move above $101.90 we will be calling this idea a bust for now.

Oil D1 Chart

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