Crude Oil Price Breaks Key Support at $56.40 Vs US Dollar

Crude Oil Price Breaks Key Support at $56.40 Vs US Dollar

  • – Crude oil price after a nice upside move faced sellers at $58.00 against the US Dollar and started a downside move.
  • – There was a break below a major descending channel with support at $56.40 on the hourly chart.
  • – Recently in the US, the API Weekly Crude Oil Stock report in the week to Nov. 10 was released.
  • – According to the report, there was a rise in the crude oil inventories by 6.5 million barrels.

 

API Weekly Crude Oil Stock

Recently in the US, the API Weekly Crude Oil Stock report in the week to Nov. 10 was released. The market was positioned for a decrease in the crude oil inventories by around 1 million barrels.

 

However, the actual result was disappointing, as the report pointed a rise in the crude oil inventories by 6.5 million barrels. Most analysts were not expecting a rise in the crude oil inventories by 2 million barrels.

 

Overall, there was an increase in selling pressure on oil price and it moved below the $56.00 support area.

 

Oil Price Technical Analysis

There was a good upside wave in crude oil price during the past few days above $55.00 against the US Dollar. However, the price failed to move above the $58.00 level and faced a lot of offers, prompting a downside reaction.

 

Oil Price Technical Analysis

 

The price started a downside move and traded below the $57.00 support. The most important thing was a break below a major descending channel with support at $56.40 on the hourly chart, which has opened the doors for more losses.

 

The price recently traded below the 100 hourly simple moving average and formed a low at $54.99. It is currently correcting higher with an initial resistance around the 23.6% Fib retracement level of the last decline from the $57.32 high to $54.99 low.

 

There are many hurdles on the upside like $56.00 and the 50% Fib retracement level of the last decline from the $57.32 high to $54.99 low at $56.16 where sellers would appear. Therefore, any major corrections toward $56.00 are likely to face offers in the near term.

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