The price of crude oil last week, came down to test a key target at $79.00. For 3 straight days (W-F), the price of the crude oil set lows within $0.05 of that $79.00 target and stalled the fall. The price rebounded into the close on Friday and closed higher on the day.
Today, the momentum higher continued and the price moved up to test the 200-hour MA (green line on the chart below) at $81.82. Just above that level sits the 50% midpoint of the move down from the August 10 high. That level comes in at $81.92 (see chart below). The high price reached $81.75 – within $0.07 of the 200-hour MA level.
Subsequently, the price has rotated lower and in the process, has now retraced all the gains. The move lower has also retested the 100-hour MA at $80.47 (blue line on the chart below). The low price reached $80.44 just below that key MA level.
So support today has held near the lower 100-hour MA at $80.47. Resistance held near the 200-hour MA and 50% retracement. The battle lines have been drawn with the MAs doing their jobs so far.
Traders will look to trade the range and use the levels to monitor a break. Sellers are more recently making the play. Get below the 100 hour MA and the sellers can push harder.
This article was written by Greg Michalowski at www.forexlive.com. Source