FX.co ★ CRUDE OIL: Daily analysis for August 05, 2013

Daily chart: CL tried to break the resistance at 106.70 level, but did not succeed. Now, CL is trying to fall back to the next support level at 103.85. If this pair does consolidate above resistance at 106.70 level, it would be expected to rise to the level of 109.93. Furthermore, if CL manages to break the support level of 103.85, it is expected to drop to the level of 100.33. The MACD indicator remained in negative territory and showed some weakness in the bearish trend last week.

H4 chart: CL found strong resistance at 108.78 level and this fell below support at 107.44 level. Now, higher CL is forming a pattern low below this strength and it is likely to fall to this support at the level of 105.61. If CL manages to break this support, it is expected to fall to the level of 104.09. On the other hand, if CL manages to break the resistance level at 107.44, which would be expected to rise to the level of 108.78. The MACD indicator is in extreme overbought and entering negative territory, which could favor CL current bearish trend.

H1 chart: CL is making a bullish rebound at the support level at 106.02 and this is trying to break the resistance at 106.84 level. As you can see, at current levels a Point of Control (POC) is forming. If CL manages to break the resistance level of 106.84, it is expected to rise to the level of 107.82. Furthermore, if support CL manages to break at the level of 106.02, it is expected to drop to the level of 105.50, below the SMA 200. The MACD indicator is showing a lot of weakness in the current bearish trend, and is entering extreme oversold levels, so we must be cautious. However, CL is forming a higher low pattern.

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if CRUDE OIL breaks a bullish candlestick; the resistance level is at 106.84, take profit is at 107.82, and stop loss is at 105.86.