WTI Crude Oil Forecast: Rejected at Resistance but Bullish Structure Remains
WTI Crude Oil Talking Points:
- Oil prices were rejected at resistance this week and pushed back-below the 200-day moving average.
- From the daily chart there’s now an ascending triangle formation with resistance just inside of the $80-handle, and that keeps the door open for bullish breakout potential.
- Support in oil has recently held the $75.61 Fibonacci level and that remains a spot that buyers would want to hold to keep the door open for topside breakouts.
- I’ll be discussing these themes in-depth in the weekly webinar. It’s free for all to register: Click here to register.
All in all, it’s been a pretty slow three months in oil markets. After a decisive bearish trend drove WTI from above $90 to below $70 in late-2023 trade, bulls have continued to show some element of support, even if it has been slow. There’s been an inability for buyers to push above the $80 handle, and that’s led to a grinding range over the past few months, although there could be a bullish bias as derived from the recent pattern of higher-low support, shown on the weekly chart below.
Also of interest here is the 200-day moving average, which has come back into play over the past month. Bulls have continually tested above this level, but they’ve lacked the ability to drive trends beyond up to this point.
WTI Crude Oil Weekly Price Chart
Going down to the daily chart shows this as an ascending triangle formation, which would keep the door open for bullish breakout potential. For that scenario, defense of the upward-sloping trendline would be key and there’s another spot of possible support to investigate before that might come into play, and that’s the 75.61 level which is the 61.8% Fibonacci retracement of the long-term move in oil, which I’ll look at a little later.
WTI Crude Oil Daily Price Chart
Crude Oil Longer-Term
Given the potential for bullish trends if price can push over the 80-handle, it’s worth looking at some historical scope given the importance of that price. While there’ve been multiple episodes of price trending over the 80-handle over the past few years, there have also been several inflections in that zone, specifically looking from the $75 to the $80-handle.
WTI Crude Oil Monthly Price Chart
Crude Oil Short-Term
Going down to the four-hour chart highlights the importance of that 75.61 level, which had helped to set support twice over the past couple of weeks. If sellers can elicit a break below that, then the next spot of potential support would be around the trendline projection, which for next week would align with around the $74 level.
On the resistance side, there’s a prior swing taken from the daily chart around 78.77 which has also shown multiple inflections over the past couple of weeks. That would be the first spot for bulls to contend with, after which the 79.77/80 level would come into view.
If buyers can force a break of the 80-handle next week, that could end up being a difficult move to chase as it would be the first test above the big figure in more than three months. Instead, looking for a pullback to support at that level, with a show of response from bulls, could open the door for bigger-picture bullish trend potential.
WTI Crude Oil Four-Hour Chart
--- written by James Stanley, Senior Strategist
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.
FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.
FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.
GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2024