Crude Oil - Top Down Analysis - SELL Pending - 31st March 2021

Crude Oil - Top Down Analysis - SELL Pending - 31st March 2021 (Closed)

Good morning team,

The USDCAD has appeared to break out from the falling wedge structure, we will possibly be looking to revisit the currency pair. Furthermore, technically crude oil is setting up a number of bearish structures on multiple time frames. Fundamentally, crude oil demand could be set to decrease especially in Europe as they continue to extend covid-19 lockdowns.  This week OPEC is set to continue supply cuts to curb the reduced supply. However, the main mover or risk to the energy industry is Joe Bidens infrastructure spending which has put climate change at the front of the bill. The New York Times has reported funding will be directed to the electric grid, energy-efficient housing, electric vehicle charging stations and other clean energy. Electric vehicle stocks and green energy are amongst the top performers this week.

Crude oil has enjoyed a huge run over the past year with very little setbacks, therefore it could be time for a reasonable correction on the liquid gold.

Crude Oil – Monthly Charts

Firstly, today is the last day of the month, therefore the close on this candle is very important. If crude oil closes in a similar position this could be considered a doji candle, which can indicate indecision or reversal opportunities in the market, especially on the monthly time frame. There is also a negative trend line coming into play.

Crude Oil – Weekly Charts

Crude oil has moved back beneath the negative trend line after setting up a fake breakout. Key support zones to the downside can be found at 54.80 and 51.00.

Crude Oil – Daily Charts

There is a key trend line support holding crude oil at its current levels. A breakdown from here will draw sellers into the market.

Crude Oil – 4 Hour Charts

The shorter-term time frames are showing a bear flag structure. Here on the trading floor, we are waiting for any signs of a breakdown on crude oil. Keep in mind there are two structures that need to be broken, the bear flag and also the inclining trend line support. There will most likely be a re-test on once of the structures therefore we do not need to rush the position. Targets can be found at 54.80 and 51.00.

Stop losses will need to go above 62.00. We will keep you posted on this trade setup.

Trade Setup
SELL - Pending Breakdown


Take Profit

Stop Loss