Since the beginning of May, Crude Oil fell from 46.81 to 43.36 shedding part of its earlier gains. Crude oil importing statistics and news jitters from Saudi Arabia are affecting the Price action. Mixed set of data and speculation are influencing market sentiment, leading to optimism and neutrality at same time. Current Price value of Crude Oil is 45.41
Below is the 4h chart of Crude oil with Price action analysis.
1. Price action is oscillating around the 25 period Moving average
Speculation is rampant in crude oil, weak hand players are shaken out of market structure. As an indication of this we can see price action hovering around exponential moving average. Tight consolidation in between the trends will be confusing enough for traders. Cautious investor sentiment is affecting the price action again.
2. Large shadows show Volatility in Crude oil.
Large and stubby shadows on candlesticks are volatility traps caused by structural shakeout of weak hand players. Smart money players often use this kind of price action to place themselves ahead of the curve. Shadows are accurate measurement of volatility for discretionary traders. Keep an eye on Market volatility to get a better gauge of future market direction.
3. Price action testing the Resistance zone at 46.00.
Market previously tested the resistance zone at 46.00 which resulted in failure to break the zone. Previous attempts are unsuccessful means sellers are defending the resistance zone. It’s interesting to watch what will happen this time, if price action attempts to test the resistance zone at 46.00 again. Traders should check the price action at resistance levels 46.00 and 46.20.
Investors must focus on market structure, volatility to get a better gauge of future market direction. Also keep an eye on fundamentals, any potential news events from OPEC will influence the price action. Crude oil is now dominated by speculations and anticipations.
