Crude Oil Price Technical Forecast: WTI Spills Lower- Correc...| MENAFN.COM

Thursday, 18 August 2022 11:03 GMT

Crude Oil Price Technical Forecast: WTI Spills Lower- Correction Levels

(MENAFN- DailyFX) Crude Oil Technical Forecast: WTI Weekly Trade Levels

  • Crude Oil updated technical trade levels – Weekly Chart
  • WTI marking outside-day reversal through support- threat for deeper correction ahead
  • New to Oil Trading? Get started with this Free How to Trade Oil-Beginners Guide

Crude oil prices plummeted more than 9% this week with WTI marking its worst single day loss since mid-March . The outside-day reversal takes price to fresh multi-month lows with the breakdown threatening a deeper correction in the days ahead. These are the updated targets and invalidation levels that matter on the oil price weekly technical chart.

Crude Oil Price Chart – WTI Weekly

Chart Prepared by Michael Boutros , Technical Strategist; Crude Oil (WTI) on Tradingview

Notes: In last month's Crude Oil Technical Forecast we noted that the WTI,“breakout is testing initial resistance targets here (122.55). From at trading standpoint, a good zone to raise protective stops – look for downside exhaustion ahead of 109.14 on pullbacks...” Oil briefly registered a high at 123.645 the following week before marking a massive outside-weekly reversal lower with price marking a firm close below 109.14. The break has kept our focus lower in crude with the decline now breaking confluent support this week at the 61.8% Fibonacci retracement of the April rally (104.66)- the correction is underway.

Initial support being tested here at the 75% parallel of the 2020 / 2021 pitchfork with more significant support objectives seen at the 100% ext of the June sell-off (91.86) and a key confluent zone at the 100% extension of the March decline / 61.8% retracement of the November rally / 52-week moving average around 87.15/88.54. Both of these regions represent areas of interest for possible downside exhaustion / price inflection IF reached. Initial weekly resistance back at 104.66 backed by medium-term bearish invalidation now lowered to the June high-week reversal close at 110.01.

Bottom line: The crude oil correction threatens a deeper cut in the weeks ahead- that said, we're on the lookout for downside exhaustion near key measured levels lower down. From at trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be capped by 110 IF price is heading lower on this stretch with a break exposing measured targets towards 91.86 and beyond. Ultimately, a larger pullback may offer more favorable opportunities closer to uptrend support with a breach / close above 114.80 needed to mark resumption.

For a complete breakdown of Michael's trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Crude Oil Trader Sentiment – WTI Price Chart
  • A summary of IG Client Sentiment shows traders are net-long crude oil - the ratio stands at +1.35 (57.39% of traders are long) – typically weak bearishreading
  • Long positions are12.74% higher than yesterday and 11.69% higher from last week
  • Short positions are19.83% lower than yesterday and 26.32% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger WTI-bearish contrarian trading bias from a sentiment standpoint.


Active Weekly Technical Charts
  • British Pound (GBP/USD)
  • Euro (EUR/USD)
  • Gold (XAU/USD)
  • S&P 500, Nasdaq, Dow
  • US Dollar Index (DXY)
  • Australian Dollar (AUD/USD)
  • Canadian Dollar (USD/CAD)
  • New Zealand Dollar (NZD/USD)
  • Japanese Yen (USD/JPY)

--- Written by Michael Boutros , Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.