Crude oil price is under pressure again today and has edged lower to $55.46. Will the downward trend continue?
8 August 2019, OctaFX – The price of crude oil fell deep into the bear territory after the EIA released inventories data for the past week. Numbers showed that inventories rose by 2.35 million barrels.
This was higher than the drawdown of 2.84 million that investors were expecting. It was the first report of an increase of inventory since June 12. Before this report, US inventories had dropped by almost 50 million barrels. Investors are still worried about the growing tensions in the Middle East and the likely slowdown of the global economy as trade wars persist.
Crude oil price technical analysis
The price of Brent crude oil declined sharply to a low of $55.46. Since May, the price has dropped by more than 20%, which puts it in bear territory. On the daily chart below, the price is below the 50-day (blue) and 25-day (red) EMAs.
The XBRUSD pair also appears to be forming an inverted cup pattern. The RSI has also dropped below the oversold level of 30. The price is slightly below the 23.6% Fibonacci Retracement level. Therefore, there is a likelihood that the pair will continue moving downwards to test the previous support of 50.
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