Crude Oil Technical Forecast: WTI Weekly Trade Levels
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.
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.
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