Oil prices have slowed down their rise from below $43 early May as resistance at $50-51 is formidable. The most probable price action I expect from now on is a rejection at current levels and break below support at $47.50. On May 15th while Oil prices were rising above $49 I said the following on twitter….
#OIL #CL a rejection between current levels of 49$ and 50$ could result in a deeper correction towards low 40’s pic.twitter.com/G97DkO1EoH
— Alexandros Yfantis (@alexanderYf) May 15, 2017
I continue to believe that a rejection at current levels is the most probable outcome and this is expected to lead prices even lower towards low 40’s and why not high 30’s.
Oil is trading below the 4 hour Kumo (cloud) and is showing rejection signs at the 61.8% Fibonacci retracement resistance. Important support is found at 48$ for the short-term. Resistance is at 49.40$ and at 50$. As long as the price is below the 4 hour Kumo I will be leaning on the bearish side. At the same time, I believe USD/CAD will conclude its downward pull back and resume its up trend towards 1.40-1.42.
