Red lines- bearish channel
Blue line- resistance trend line
Oil price is trading around $74.95. Short-term trend remains bearish as price continues making lower lows and lower highs inside the red downward sloping channel. However price has reached important support area around $74-$75 and the chances for a bounce higher have increased. The RSI has already provided us with a bullish divergence. So far there is no reversal confirmation. Short-term resistance is found at $76.75 and a break above this level could be the reversal signal we are expecting to see. A break above the blue trend line resistance will most certainly push price towards the upper channel boundary around $81.50. This will be the first step for a bigger reversal. Until then bears remain in full control of the trend.