December Light Crude retreated below support at $50/barrel, suggesting another test of primary support at $42/barrel.
Respect of primary support would suggest further ranging between $42 and $52/barrel. Breach of support, which seemed so unlikely only two weeks ago, is now a possibility and would warn of another test of the January trough at $35/barrel.
December Light Crude is retracing to test new support at $50/barrel after the recent breakout.
If we look at the longer term weekly chart we can see how important this level is. Respect of $50 would confirm the primary up-trend. There is still doubt that support will hold — and that OPEC will be able to craft an agreement that will satisfy members while restricting supply. Failure would suggest that crude will revert to ranging between $40 and $50.
