Chart of the Week – 15th August 2022

USOIL or USOUSD – Oil prices continue to decline as crude output gets a boost.

• Resistance Zone: $105 to $108
• Key Resistance: $101
• Major Pivot Point: $95.40
• Key Support Level: $88
• Support Zone: $84 to $80
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line

Chart Analysis

Oil prices continued to drop as Saudi Aramco confirmed it is ready to ramp up the output to its maximum capacity of 12 million barrels per day (bpd). It gets a go-through from the Saudi Govt. There could be an upside breakout if the Chinese Economic Data to be published today indicates higher demand. The chart shows that oil has been moving in a Downward Channel struggling to break away from the downtrend since June this year. Currently, oil is just above the midline support of the channel and still well below the Pivot at $95.40 on the chart. It seems oil found a Support at $88, however, a continued decline in oil prices in the next few sessions could mean a retest of this support level.

Daily Chart Directional bias - 2 Weeks 

Trade Insights

USOUSD – Chart shows Viable Short Positions below Pivot point at $95.40, with the first target of the Key Support level at $88, then further test of the support Zone at $84 to $80.

Alternatively, Long positions if oil moves above the Major Pivot point at 95.40 with the target of Key Resistance Level at $101 and then the test of Key resistance zone at $105 to $108.