Crude Oil Price Nosedives Below $40, Dollar Outperforms

Key Highlights

  • Crude oil price started a major decline after it failed to surpass $43.50.
  • There was a break below a crucial bullish trend line near $42.40 on the daily chart of XTI/USD.
  • Gold price is also struggling to climb above $1.940 and remains at a risk of more losses.
  • GBP/USD and EUR/USD extended losses below key supports.

 

Crude Oil Price Technical Analysis

Earlier this month, crude oil price formed a significant top near the $43.20 level. The price started a strong decline and broke many supports near $42.00 and $40.00.

Looking at the daily chart of XTI/USD, the price struggled to clear $43.20 and $43.50. As a result, there was a strong bearish reaction, and there was a break below a crucial bullish trend line near $42.40.

The price even settled below the $40.00 support and the 200-day simple moving average (green). Moreover, there was a break below the 50% Fib retracement level of the upward move from the $34.34 low (formed in June 2020) to $43.55 high.

It seems like the price might continue to decline below $36.50 and the 76.4% Fib retracement level of the upward move from the $34.34 low (formed in June 2020) to $43.55 high.

The next major support is near the $35.50 level and the 100-day simple moving average (red). Any further losses could lead the price towards the $32.00 support. If there is an upside correction, the previous support near $38.50 and $39.50 may perhaps prevent gains.

To move back into a positive zone, the price must climb above the $40.00 resistance. Similarly, there was an increase in selling pressure on GOLD. EUR/USD and GBP/USD also declined and broke key supports near 1.1820 and 1.3050 respectively.

Economic Releases to Watch Today

  • BoC Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.