WTI Crude Oil Technical Analysis

Crude Oil managed to break
above the 80$ resistance as the US Jobless Claims last week showed that the
labour market might be in a much better state than feared. In fact, on the
demand side the recent economic data has been consistently missing forecasts
leading to weaker expectations for the market, but the strong data and
revisions on Thursday changed the picture in the short-term. On the supply
side, nothing has changed, as we still have the OPEC+ voluntary output cuts
until the end of Q2 and the tensions in the Red Sea are still present.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil broke
through the $80 level and extended the rally into the key resistance around
the $83 level where we can also find the upper bound of the rising channel.
This is where we can expect the sellers to step in with a defined risk above
the resistance to position for a drop into the lower bound of the channel. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and increase the bullish bets into the $93 level.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the previous resistance now turned support at the
$80 level where we have also the confluence with the
38.2% Fibonacci retracement level.
The sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and increase the bearish bets into the lower bound
of the channel.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
latest rally into the $83 resistance diverged with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal for a pullback into the $80
support since the target is usually the base of the divergent formation. A
break below the most recent swing low at $81.80 should confirm the bigger
correction into the $80 level and see the sellers increasing the bearish bets
into the lows.

Upcoming Events

Today we have the FOMC rate decision where the Fed
is expected to keep rates unchanged. Tomorrow, we conclude with the latest US
PMIs and Jobless Claims figures. Weak data is likely to weigh on Crude Oil,
while strong figures should give it a boost.

See the video below

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