Last Thursday, oil prices lost more than 7% and touched $60 per barrel at the moment. Asset broke through the medium-term price channel and, after retesting its lower border, returned to the level of $61, which acts as local support for now. The medium-term trend will change to bearish if the $60 level is broken. This quotation zone also corresponds to the neck level of inclined head and shoulders figure, which has formed in the last 2 weeks of trading. Most likely in the nearest future bears will test it and, if successful, the price may drop down to $56.
The decline on Thursday occurred after the US Federal Reserve cut interest rates and Jerome Powell said that this did not start the long decline cycle that the market was anticipating. Earlier this week, oil prices were falling amid a promise by US President to introduce new duties on China goods. This is likely to limit fuel demand for the two largest oil consumers in the world. Trump said he will introduce 10 percent tariffs on Chinese goods worth $ 300 billion from September 1 and could increase duties even more if PRC leader does not hurry up to close a deal. Beijing has already promised to respond to new tariffs from the United States and warned that Washington will be fully responsible for the consequences.