WTI Crude Oil Technical Analysis

Crude Oil continues to
maintain a bearish bias for now amid weaker US data and the failed breakout
above the $80 level. On the supply side, nothing has changed as the tensions in
the Red Sea are still present and the OPEC+ extension of the voluntary output cuts into
Q2 didn’t spark a rally in prices.

On the demand side, the
recent economic data has been consistently missing forecasts leading to weaker
expectations for the market. As long as the current trend remains intact, we
can expect lower price ahead and a bigger correction to the downside.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil failed
to break out of the key $80 resistance zone
following the miss in the US ISM Manufacturing PMI and fell to new lows. The
target on the downside should be the upward trendline around
the $76 level. That’s where we can expect the buyers to step in with a defined
risk below the trendline to position for a rally into the $80 resistance with a
better risk to reward setup. The sellers, on the other hand, will want to see
the price breaking lower to increase the bearish bets into the $64 support.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
recently broke below the upward trendline invalidating the bullish setup and
turning the trend around. The sellers piled in around the downward trendline
where they had the confluence with the
red 21 moving average and the Fibonacci retracement levels.
The buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and position for a break above the $80 resistance.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the consolidation around the $78 level. A
break below the counter-trendline should point to lower prices and see the
sellers increasing the bearish bets into the $76 level. The buyers, on the
other hand, might lean on the counter-trendline to position for a break above
the downward trendline with a better risk to reward setup.

Upcoming Events

Tomorrow we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment survey. Strong data is likely to support Crude
Oil in the short-term, while weak figures should send the prices lower.

See the video below

This article was written by FL Contributors at www.forexlive.com.