Red lines- bullish channel

Blue line- resistance

green lines- Fibonacci retracement extension targets

In our technical analysis on Oil price yesterday we noted the increased chances of a move lower. Oil price had formed a lower high around $82.60 and today is making new lower lows below the August 17th low. This is a clear sign of weakness. Oil price has the potential to move even lower over the coming days. Price has formed a lower high and now a lower low. Our first downside target remains at $76.50. As long as price is below the blue resistance trend line, Oil price will remain vulnerable to selling pressures. We might see another bounce higher towards the blue resistance trend line at $81 price area, because in the near term the RSI is oversold.