Hi Traders! Today I am sharing with you the Oil short term forecast and technical analysis post. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available!
Oil H1(1 Hour) Chart Analysis – Key Support Zone, Bullish Convergence, ADX Indicator
On the H1 chart, the price which was moving lower reached a key support zone that has formed by the 61.8%(92.590) Fibonacci expansion level of the first wave. The price respected this zone and is currently bouncing higher from this zone. Also, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed on 15th March 2022 and the second low that has formed on 16th March 2022 based on the MACD indicator. The price then moved higher and broke above the last high at 97.888 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider these as evidences of bullish pressure. So based on all this, my short term view here is bullish and I expect the price to move higher further after pullbacks.
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Arvinth Akash
Traders Academy Club Team
