On the daily chart below, we can see that the market is still trading within the range defined by the resistance at $82 and the support at $73. There’s no clear edge on either side as the buyers are looking at China reopening demand and low supply, and the sellers are looking at the global recession from central banks tightening and demand destruction.
When there’s uncertainty in the market, this is generally what you get: a choppy price action.
On the 4 hour chart below, we can see more closely the price action within the range. The best strategy in such a market is just to stay out waiting for a clear breakout supported by a fundamental development.
One can also “play the range” buying at support and selling at resistance, but as you can see in the chart, the price doesn’t respect perfectly the levels all the times, so you may miss out or chase the price and end up giving back to the market.
We can also notice that recently the cross of the moving averages has led to a pretty reliable trend towards one of the boundaries. Now, the moving averages have crossed to the downside, and we may expect the price trending towards the support.
On the 1 hour chart below, we can see that the moving averages are acting as resistance but there’s also a divergence between the price and the MACD which signals a weakening selling pressure.
Generally, we can see a pullback to a swing level or trendline before another push in the original direction. In this case, for the sellers we should have two possible entries:
· The first is to wait for the price to pullback to the resistance at 77.73 where there’s also the 38.2% Fibonacci retracement level and enter targeting the 73 level.
· The second is to wait for the price to break the support at 76.11 and enter targeting the support at 73.
