Prices went up upon falling to a low of 46.79 last week with investors betting that plunge of oil prices was too excessive. As we look forward to the trading week ahead, OPEC continues to remain on their stand not to curb oil production. Demand for oil this year is projected to decline and with the excessive supply, prices of oil continues to drop unless OPEC chooses to take action.
Based on H4 chart, with oil prices expected to fall further, a Fibonacci extension can be constructed. The nearest support lies at 46.79 and should candles continue to break below which is highly possible, candles can be expected to continue plunging all the way to Fibonacci extension 161.8% at 41.83.
For intraday traders looking for shorting entries, once candles have broken and just closed below 46.79, a shorting entry can be made with the nearest profit-taking level at Fibonacci extension 127.2% at 44.61.
|Trend Direction||S2||S1||R1||R2||R3||Entry||Stop loss||Exit|