Mid-Week Technical Outlook: Oil closes below 200-day SMA
<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a> </strong></p>
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<ul>
<li>Crude dives over 4% in previous session</li>
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<li>Prices secure daily close below 200-day SMA</li>
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<li>Monthly and weekly timeframe signal further downside</li>
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<li>Bears in control on D1 charts but RSI near oversold territory</li>
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<li><span lang="EN-US" xml:lang="EN-US">Key levels of interest at $82, $78 and $74</span></li>
</ul>
<h3>Oil struggled on Wednesday after sliding more than 4% in the previous session to levels not seen since July.</h3>
<p><img fetchpriority="high" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/CrudeH1.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="b6600ec9-a3b2-472c-aadf-bb89bb9a3c75" data-src="/s3-static/users/user17/CrudeH1.png" /></p>
<p>The global commodity was hammered by <strong>demand concerns</strong> which provided a platform for bears to drag prices <strong>below the 200-day Simple Moving Average (SMA)</strong> for the first time in over three months.</p>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/CrudeDaily1.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="c7865f14-8a95-432b-a7a1-4dbb663154ba" data-src="/s3-static/users/user17/CrudeDaily1.png" /></p>
<p>It is worth noting that technical indicators were already in favour of bears before yesterday’s steep selloff. Oil was already respecting a <strong>negative channel on the daily charts</strong>, creating lower lows and lower highs. The daily close below the 200-day SMA may open doors to lower price levels in the short to medium term.</p>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/CrudeDaily_6.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="d917eb77-c89b-4f2c-9e7f-8f8066f80bcb" data-src="/s3-static/users/user17/CrudeDaily_6.png" /></p>
<p>Zooming out to the weekly charts, we see a similar bearish picture with crude on the path to securing its third negative trading week. Prices have <strong>broken through the $80 weekly support</strong> with the next key level of interest on the W1 timeframe around $73 and $68.</p>
<p><img loading="lazy" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/CrudeWeekly_1.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="bd2b4545-dd81-4cde-9c02-2957aff53920" data-src="/s3-static/users/user17/CrudeWeekly_1.png" /></p>
<p>Peeking at the monthly charts, the <strong>bearish candlestick created in October </strong>further supports the bearish case, signaling the possibility of lower prices to come with <strong>key monthly support found at $66.50.</strong></p>
<p><img loading="lazy" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/CrudeMonthly_0.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="f051dae9-8cba-4df7-98ae-6ba539ce716d" data-src="/s3-static/users/user17/CrudeMonthly_0.png" /></p>
<p>Redirecting our attention back to the <strong>daily timeframe</strong>, bears are certainly in control and may use the current momentum to drag crude toward the next daily support at $74. However, the <strong>Relative Strength Index (RSI) is flirting near 30</strong>, indicating that crude may be oversold. While this could trigger a technical rebound down the road, the path of least resistance remains south.</p>
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<h3>Sustained weakness below the 200-day SMA may send prices towards $74 and $72.50.</h3>
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<h3>Should prices push back above the 200-day SMA, this could spark a move back towards $82</h3>
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<p><img loading="lazy" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/CrudeDaily3_0.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="c28e0207-0bb7-4c3f-b6ea-df0c28c33432" data-src="/s3-static/users/user17/CrudeDaily3_0.png" /></p>
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<p><img loading="lazy" decoding="async" class="size-full wp-image-54242 alignleft" src="https://www.investmacro.com/articles-analysis/wp-content/uploads/2014/07/Forex-Time-Logo.png" alt="Forex-Time-Logo" width="262" height="90" /><strong>Article by <span><a href="https://www.investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></span></strong></p>
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