Oil prices tumbled on Monday after U.S. President Donald Trump on Sunday said he would sharply hike tariffs on Chinese goods this week, risking the derailment of trade talks between the world's two biggest economies.
US WTI Crude Oil futures were priced at $ 60.51 a barrel at 08:30 GMT on Monday, down by $ 1.43 a barrel or 2.3 percent from their last closing.
Brent oil futures fell below $ 70 a barrel, traded at $ 69.33 a barrel, down by $ 1.52 a barrel, or 2.2 percent since their last closing.
What is the technical picture of oil?
On the chart, a clearly-shaped head with shoulders is visible, and its neckline is already broken and tested. The head's target is about 58.30. Since we are currently seeing a gap at the price due to Trump's statement, it is better now to wait for a correction to Fibonacci 23.6 from where we can position Sell.
Indicators: The price is below 50 and 200 EMA, with a strong resistance at this stage.
RSI - In over sold values, which supports the correction scenario to the broken trend line and 23.6% Fibonacci.
Entering a deal: After the price has made its correction and signaled that there is no power to re-enter the upward channel, we can enter "sell" orders.
Alternative Scenario: If the price is able to re-enter the broken ascending channel and the neckline, then we can expect a new upward motion to test the previous highs.
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