WTI Crude Oil Technical Analysis | Forexlive

The OPEC+ production cuts have
not led to any rally in the oil market, but they helped with stabilising the
prices around the $70 level. From this perspective, OPEC+ is doing a good job
but the risk of a global recession and even lower demand are still present in
the market and keep the bias skewed to the downside. In the short term though,
we might see higher prices because of more economic stimulus in China given
that it is about to slip into deflation. It’s unlikely that baby steps like the
10 bps cuts we saw in the previous month would be sufficient to make the prices
rally though.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that since bouncing
from the $67.00 support, Crude
Oil has rallied all the way back to the $75.00 resistance. That’s where the
price has opened the last time Saudi Arabia surprised with a voluntary
production cut and the other OPEC+ members extended the cuts into 2024. What
happens here will be key for the oil market going forward as a break to the
upside can open the door for a rally into the $83.00 resistance.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that Crude Oil has
been trading within a rising channel coming into the $75.00 level. We can see
that the moving averages are
crossed to the upside and acting as dynamic support for the price. We are
likely to see the sellers stepping in here with a defined risk above the level
and target the $67.00 support again. The buyers, on the other hand, will want
to see the price breaking higher before piling in more aggressively and start a
rally towards the $83.00 high.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
last leg higher is diverging with
the MACD right
at the $75.00 resistance and the upper bound of the channel. This is generally
a sign of weakening momentum often followed by pullbacks or reversals. In this
case, we should see a pullback into the previous swing low level where we can
also find the 50% Fibonacci
retracement level and the lower bound of the channel
for confluence. That
would be a good spot where the buyers can lean on to with a defined risk below
it and target a break above the resistance. If the price breaks below the lower
bound of the channel though, the bullish setup would be invalidated, and the
sellers would be in control.

Upcoming Events

Today the main event is
the US CPI report. We are likely to see risk off in the markets and Crude Oil
lower if the data beats expectations, especially on the core numbers. On the
other hand, a miss to the forecasts should lead to a positive mood in the
markets and Crude Oil should be supported. After the US CPI release, we will
have the US Jobless Claims on Thursday and the University of Michigan Consumer
Sentiment on Friday.