Recent crude oil price action has given us a valuable lesson — seemingly strong rebounds can also reverse at key levels.
This week's movement was quite typical. At the beginning of the week, supported by geopolitical situation and favorable inventory data, oil prices rallied from 55.78 all the way up to 59.80, with a substantial rebound and strong bullish momentum. But then the problem emerged — after reaching highs, momentum began to fade. Expectations of slowing global economic recovery started to gain traction, concerns about crude oil demand intensified, and prices fell back from those highs, ultimately closing near 58.77. The whole week saw prices oscillating within the 55-60 range without providing a clear direction.
The 4-hour chart paints a clearer picture. Price formed a "V-shaped rebound + failed rally" pattern — initially breaking through the previous consolidation zone, but running out of steam around 60, indicating substantial resistance at this level. Currently, prices are oscillating within the short-term range of 58.25-59.80, moving averages still show bullish alignment, but KDJ and MACD have already displayed bearish divergence signals, meaning a pullback is needed in the short term.
Key levels to keep in mind: 58.25 below is the rebound support; if it fails to hold, prices may continue exploring the 57-56.71 range; 59.80 above is resistance, and breaking through it is necessary to open further upside space.
How to trade next Monday? Here are two approaches. If looking for a rebound, when prices pull back to the 58.00-58.25 area, you can build long positions in tranches targeting 59.00-59.50. If the rebound reaches 59.50-59.80 and encounters resistance, this would be a good time to consider establishing short positions in tranches, targeting 58.50-58.25. That's how markets work — catching the rhythm is most important.
Recent crude oil price action has given us a valuable lesson — seemingly strong rebounds can also reverse at key levels.
This week's movement was quite typical. At the beginning of the week, supported by geopolitical situation and favorable inventory data, oil prices rallied from 55.78 all the way up to 59.80, with a substantial rebound and strong bullish momentum. But then the problem emerged — after reaching highs, momentum began to fade. Expectations of slowing global economic recovery started to gain traction, concerns about crude oil demand intensified, and prices fell back from those highs, ultimately closing near 58.77. The whole week saw prices oscillating within the 55-60 range without providing a clear direction.
The 4-hour chart paints a clearer picture. Price formed a "V-shaped rebound + failed rally" pattern — initially breaking through the previous consolidation zone, but running out of steam around 60, indicating substantial resistance at this level. Currently, prices are oscillating within the short-term range of 58.25-59.80, moving averages still show bullish alignment, but KDJ and MACD have already displayed bearish divergence signals, meaning a pullback is needed in the short term.
Key levels to keep in mind: 58.25 below is the rebound support; if it fails to hold, prices may continue exploring the 57-56.71 range; 59.80 above is resistance, and breaking through it is necessary to open further upside space.
How to trade next Monday? Here are two approaches. If looking for a rebound, when prices pull back to the 58.00-58.25 area, you can build long positions in tranches targeting 59.00-59.50. If the rebound reaches 59.50-59.80 and encounters resistance, this would be a good time to consider establishing short positions in tranches, targeting 58.50-58.25. That's how markets work — catching the rhythm is most important.