Oil has indeed built a choppy, corrective and lengthy corrective zone with the potential wave 4 (pink) as expected in last week’s wave analysis. The wave 4 (pink) correction could retrace back to the Fibonacci levels or immediately break below the support zone (green) for a bearish breakout.
Oil remains in a wave 4 (pink) after bouncing at the 23.6% Fibonacci retracement level. Usually price retraces to the 23.6-50% Fibonacci retracement level of wave 4 vs 3, which remains potential bounce and reversal spots for the end of wave 4 and the start of wave 5. Any break above the 50% Fib makes a wave 4 less likely and a break below the support trend lines could confirm it. A break below the support line (green) would confirm the current wave pattern outlook.
Oil is now building a wave 4 of a lower degree OR oil is in a wave 4 of the current degree (pink). The bearish price action has been very impulsive so price has likely finished a wave 3 but the question is of which degree. More downside seems likely.
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