Crude Oil Faces Downward Risks

NEW YORK (TheStreet) - Crude oil prices followed through lower on the back of its losses last week to break below the $87.25 level on Tuesday.

This has put crude oil in a position to even weaken further towards the $86.00 level. A respite could be seen there. Further down, support lies at the $82.76 level, its Nov. 26, 2010 low.

Alternatively, on pullbacks, the $87.25 level will be targeted where a reversal of roles is likely to occur and turn the commodity lower.

Further out, resistance is seen at the $90.21 level, its Jan. 21, 2011 high, with a loss of there turning attention to its 2011 high at $91.31.

A clearance of that level is required to resume its long-term uptrend now on hold and then open the door for more strength towards the 95.00 level and its big psychological level at 100.00. We may likely see a turn lower from that level on an initial test because of its psychological importance.

All in all, further downside risk remains.

Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces The Professional Suite for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.

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