Chart: Break And Retest Setup for WTI Crude Oil (USOIL)

Remember the resistance zone I marked a few days ago?

Well, WTI crude broke above the zone!

This time, we look at the possibility of a break-and-retest situation:

WTI Crude Oil (USOIL) 4-hour chart from TradingView

In case you missed today’s Daily market recapbe aware that a lack of material escalation in the Middle East and concerns about China’s rise have limited crude oil demand.

Meanwhile, traders sensing expectations of a Fed rate cut supported the US dollar against some of its major peers.

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on crude oil and the US dollar yet, then it’s time to check the economic calendar and catch up on the daily fundamentals!

US crude oil prices, which touched the $78.00 level yesterday, have declined and are now trading closer to the $73.50 level.

How low can oil go before the bulls come in again?

We’re looking at the $72.00 psychological handle, which marks the 50% Fibonacci retracement of USOIL’s October rally. Not only that, but $72.00 would also line up with the Pivot Point area, broken trendline resistance, and the 100 and 200 SMA on the 4-hour time frame.

If USOIL does not see green candlesticks and sustained trading above the current $73.50 level, then the asset could move lower into our potential support zone, where it could attract more buying pressure.

But if the asset continues to experience negative pressure, then you may want to pay more attention to our support zone. Specifically, bearish candlesticks and sustained trading below the trendline expose USOIL to a potential pullback to the $68.00 interest area just below the S1 ($68.88) Pivot Point line and monthly lows.

Whichever bias you end up trading, remember to practice proper risk management and be aware of top market catalysts when trading it. Luck!