Crude oil drops 5%

By FXStreet Crude oil prices were falling modestly but accelerated to the downside after the release of price projections from the EIA that forecast and average $37.6 for the current year (WTI). The barrel dropped sharply and bottomed at $27.70, the lowest level since January 20.

Afterwards, bounced modestly to the upside and it was trading at $28.35, down 5% from yesterday’s closing price. Stocks in the US managed to remain unaffected by the sell-off in crude oil. Near the end of the session, the Dow Jones actually turned positive and it was up 0.22% while the Nasdaq was rising 0.19%.

Technical outlook

According to Valeria Bednarik, Chief Analyst at FXStreet, technical indicators in the daily chart supports some further declines. “Price has extended further below its 20-SMA, while the Momentum indicator heads sharply lower below the 100 level, and the RSI indicator heads south around 37”.

The decline could continue toward the 26.60 region notes Bednarik. Support level above that zone might lie at 27.90 and 27.30. On the opposite direction, resistance could be seen at 29.20, 29.85 and 30.45
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Source:: FX Street