Crude Oil Technical Analysis

Euro Weekly Price Outlook: EUR/USD Recovery Could be Short Lived
Euro turned just ahead of resistance this week with the price consolidation coiling into the April range. Here are the levels that matter on the EUR/USD weekly chart.

Crude Oil Weekly Technical Forecast: Support May Soon Lead to Rally
Crude oil took a spill last week, but with support at its feet look for it to try and bounce after a bit more weakness first.

US Dollar Price Forecast: Whose Brave Enough To Short DXY in May?
Despite late week volatility after a stellar NFP report, EUR/USD is nearing the lowest levels in two years on the back of US Dollar strength that could extend in the favorable month of May.

S&P 500, DAX, FTSE 100 Technical Forecast
Further gains in store for S&P 500 as index consolidates above 2900, DAX eyes topside resistance, FTSE 100 meets support.

Pound Surge Has GBPUSD Range to Run, But Resistance Coming in Elsewhere
Pound’s most aggressive rally in three months raises serious expectations that the currency will seriously struggle to meet in the week ahead. Watch for a stall and beware range reversals.

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In a week that started off with a gap-down, Crude Oil prices have continued to grasp for support. Prices pushed-lower at the start of the week following a couple of tweets from President Trump on Sunday. This created a quick move of weakness in WTI that saw prices push down to 60.06 on Monday, with buyers showing up just ahead of a test of the psychological level at 60.00. This was the third zone of support identified in the technical forecast from a few weeks ago; and after this came into play, buyers showed up to support the bid.

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Crude Oil Price Strategy Moving Forward

At this point, given that Crude appears to be nearing a weekly and monthly close near fresh three-month-lows, traders would be likely hesitant to take on an aggressive stance just yet. But, given the recent flare of volatility that’s shown in Oil markets, that next setup may soon be around-the-corner.
On the short-side of Crude Oil, prices cut right through a previously key support zone around the 55-handle. This area on the chart had previously exhibited a bit of resistance in February, followed by a support check in early-March after bulls provoked a topside push. Around this area are a couple of additional points of interest: at 54.46 is the 50% marker of the December-April bullish move, and at 55.57 is the 38.2% Fibonacci retracement of the October – December 2018 sell-off. Collectively, these prices compose a zone of potential that could be re-purposed for lower-high resistance. A bit higher, another zone of interests exists from the prior support area around 57.47 up to the February swing-high at 57.85.

A pullback in the bearish theme to this zone on the chart could re-open the door for short-side strategies, targeting an extension of the downside move towards the 51.50 area with secondary target potential around the 50-handle.

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Last week, oil found itself in an ugly position again, but was able to find support via the low-end of a range created during Jan/Feb. The bounce on Thursday brought with it limited follow-through to end the week, however; the price action for the week resolved in the form of a reversal candle that could set into motion some more buying in the days ahead.

Next week might not bring with it rip-roaring power, as oil is already failing to follow stocks higher in the same manner in which it did on the down-side. (This may be a symptom of a broader problem on the macro-front, a story for another day.) This relative weakness could change, of course, should the ‘risk-on’ theme mature.

Looking at the near-term technical landscape, the trend-line running lower from three weeks ago is first up as resistance. This may only prove to be minor resistance, but given how crude has acted thus far that might be all that is needed to keep a lid on a bounce.

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Crude oil continues to be strikingly weak as its relationship to stocks and the ‘risk trade’ has become noticeably untethered. The initial bounce off the June low held some power, but the past couple of sessions after retesting the monthly low the bounce has been smaller.

A turn down from right around here (also the trend-line from last month) will help complete a descending wedge pattern. Given the general trend and nature of the pattern (lower high, flat bottom structure) it is anticipated that a downside break will develop.

A sustained decline through $50.54 should have the WTI contract picking up downside momentum again. The height of the wedge implies about a $4 drop, or about $46. This aligns with the weekly chart, where a confluence of support runs over from 2016.

A failure to roll down and break the $50.54 level will keep the outlook neutral, while some work on the upside will be needed to turn the trading bias bullish. The wedge could develop further and break to the top-side but risk of the breakout failing will be elevated given the generally weak backdrop in place.

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Crude oil prices climbed roughly 4.5% over the last 5 trading days as the commodity continues to edge higher. It now appears that crude oil has smashed through bearish downtrend resistance formed by the series of lower lows since late April after this past week’s healthy advance. Bullish momentum could be at risk, however, as the recent streak of gains runs into technical resistance.

Crude oil prices currently sit slightly above $60.00 and just below technical resistance posed by the 38.2% Fibonacci retracement of the commodity’s trading range since printing its year-to-date high of $66.47 on April 23. While the short-term bullish uptrend line does look to provide a bit of buoyance to crude oil price action, this level of confluence threatens to keep further upside at bay. Yet, if crude oil bulls can top this zone, the door to $62.00 could open up quickly with prices possibly eyeing the 23.6% Fib as a next upside target.

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Crude oil prices closed flat last week after fluctuating 4% between key areas of technical confluence while traders struggle to determine the commodity’s next direction. Crude oil prices have remained subdued since sliding nearly 10% earlier this month – the sharp selloff accelerated after a hard rejection at technical resistance.

If price action can top $57.50 next week – the price level near the 38.2% Fibonacci retracement of crude oil’s sharp climb to $66.00 off its December 24 low – oil trader sentiment might start to shift back in favor of bulls. Evidence of bullish momentum returning to crude oil prices could be provided by the RSI reclaiming a reading above 50. If these technical objectives can be overcome, it will likely open up the door for crude oil prices to test bearish trendline resistance from the April 23 and July 11 intraday swing highs.

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Oil prices posted the largest daily range since December 26th (2018 low) on Thursday but despite the decline, prices are poised to close just 1.26% lower on the week after rebounding off confluence support. These are the updated targets and invalidation levels that matter on the oil weekly price chart (WTI) heading into the August open.

Bottom line:Oil prices turned from key resistance last month and the decline is now testing the first major support hurdle at 54.53. The short-bias may be vulnerable a for a near-term recovery while above this threshold with the broader risk weighted to the downside while within this formation. Stay nimble heading into the August open- I’ll publish an updated Crude Oil Price Outlook once we get further clarity in near-term price action.

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Crude oil has been slumping hard lately and things could continue to worsen after a short-term reprieve. The situation could turn outright nasty if stocks roll over, certainly a distinct possibility. WTI is the stronger of the two major contracts, with it still above the June low and Brent trading below.
The technical outlook is murky at the immediate moment as things have turned a bit choppy near-term. Solid price levels aren’t readily available, but the 55.60/56.30-area (July lows/200-day) look likely to prove problematic.

On the downside, to get momentum going again the weekly/June low will need to be broken, looking at sub-50.47 for this to develop. All-in-all, risk/reward isn’t optimal at this juncture. That should clear up here shortly though as we progress through the week. Generally speaking, looking for lower prices to unfold.

Lately, the Brent contract hasn’t fared as well as its U.S. counterpart, which makes it more vulnerable to more selling ahead. This makes the U.K. contract more appealing as a short candidate once a bounce plays itself out. Watch the June low at 60.28 for resistance. On another round of weakness watch a pair of trend-lines running over from 2016 as support; 55/52.50-area.

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Crude Oil Price Chart Outlook: Trade War Selloff Eyes Support
Crude oil prices sank over 1.5% this past week in choppy trading. I noted early last Tuesday that crude oil prices were showing signs of weakness as volatility climbed amid lingering US-China trade war uncertainty as Jackson Hole loomed. Surely enough, the expectation came to fruition as bearish fundamentals aligned with a technical backdrop that pointed to the possibility of sustained selling pressure.

Evidence of waning bullish prospects for crude oil prices from a technical standpoint is also suggested by the wilting RSI as the indicator dipped back below 50 and looks to continue its overarching trend lower since April. Moreover, the struggle to reclaim the 50-day and 200-day simple moving averages may keep a lid on any rebound attempt.


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