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WTI is managing to stay above the key 58.00 support level for now.
You can see where this area served as a pivot for the market between February and March.
But despite Wednesday’s late-session rally, crude oil appears to have turned the corner at the end of April.
That sudden snap below 63.60 on April 26th was no mere correction.
It was a mass exodus of longs who had been buying WTI throughout the year.
The same thing happened between the 22nd and 23rd of May.
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As soon as the market realized WTI was going to carve a lower high at 63.60, bids dried up, which led to a crack of the key 60.30 area.
All of this leaves traders watching for a short opportunity on a retest of 60.30 as new resistance.
There are no guarantees we’ll get it, but WTI has yet to test offers in this region.
The alternative to a test of 60.30 resistance would be to watch for a close below that 58.00 support handle.
Just keep in mind that the area could extend as low as 57.30.
For now, though, all eyes are on that 60.30 resistance area as a rejection from there could take WTI crude back to 58.00 and perhaps 55.40.
Don’t become too rigid in your approach, though.
While further losses do appear likely, the market may not agree with that assessment.
If buyers do retest 60.30 resistance and close WTI back above it, we could see this market head back to the May highs at 63.60.
Until this range cracks, crude oil will be limited to 58.00 support and 60.30 resistance.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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