I took a short position in US oil an hour ago. You may see from the chart below that oil broke above the highs of the 14th and 17th of August, hit 200 sma and ema, formed a reversal pattern and is actually reversing now.
We do know that oil has been in a strong trend recently and the tendency may not be over yet. Selling rallies remains the best option for OIL traders, particularly when price rallies above previous day’s highs. That’s where most stops reside and smart money gets a chance to re-enter in the direction of the prevailing move.
Again, US CPI and FED minutes may influence the price of oil, but I do expect price to reverse and visit the lows soon. Current support of US oil is at 41.50 and key support is at the round and powerful 40 level. Who knows, maybe that is the bottom and oil will turn around, but before we state that we need to see confirmation on the charts. They are not present yet.
Despite the fact there hasn’t been much price action in these couple of hours, US session will probably bring volatility back.