The Crude Oil, #CL, on a 4-hour chart is rebounding after its fall to the 2/8 Murray low located in the 65.62 zone of strong support. Crude Oil was trading at this same price on May 27. Now we expect a correction to the 70.00 area psychological level.
The fall in the price of Crude oil from a high of 76.18 to yesterday's low of 65.62 comes as a result of the agreement reached between the Organization of the Petroleum Exporting Countries and its allies (OPEC +) over the weekend on oil production policy.
Saudi Arabia and the United Arab Emirates (UAE) did not reach a clear agreement and was struggling for several weeks until finally, both parties together with other members of OPEC + agreed to increase the supply of oil by 400 thousand barrels per day (bpd) from August.
The market reacted to this news, taking profit after a strong bullish rally. It is likely that until August, the market will try to consolidate below the 75.00 level and above 65.00.
This data could limit the rise of crude oil above the level of 75.00. In this context, the analyst of Goldman Sachs pointed out that an oil supply agreement between Saudi Arabia and the United Arab Emirates would be an upward catalyst for prices in the coming months.
Our recommendation is to buy Crude Oil above 2/8 murray around 65.62 with targets in the 4/8 murray resistance zone and 68.75 resistance zone. If this level is broken, the price will climb to the resistance zone of the 70.10 psychological level.
A pullback towards the 70.00 level will be a good selling opportunity. Since the 21 SMA and the 200 EMA are located in this area, which now act as strong resistance, markets expect an upward momentum before a new bearish wave with targets around 67.00 and 65.62.
Support and Resistance Levels for July 20 - 21, 2021
Resistance (3) 70.08
Resistance (2) 69.29
Resistance (1) 67.36
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Support (1) 65.63
Support (2) 64.28
Support (3) 62.01
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Trading tip for Crude Oil (#CL) for July 20 - 21, 2021
Buy above or if rebound 2/8 murrya at 65.62, with take profit at 68.75 (4/8) and 70.10 (EMA 200), stop loss below 65.00.
Sell below if pullback 70.10 (SMA 21), with take profit at 65.62 (2/8), stop loss above 70.80.
The material has been provided by InstaForex Company - www.instaforex.com