WTI Crude Oil Technical Analysis | Forexlive

WTI Crude Oil recently pulled
back after the big selloff following the break below the key $83 support. The
trend remains strongly bearish with the technicals pointing to further downside
and the economic data in the major economies continuing to weaken. In fact, if
we look at the US, which is generally leading global growth, the ISM Manufacturing PMI plunged further in contraction and
the NFP report missed across the board with the
unemployment rate ticking higher. These might be just early signals of even
more economic weakness ahead with the Fed likely to keep rates stubbornly high
into a recession. That’s certainly not a bullish outlook for the Crude Oil
market.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil bounced
on the $75.00 level after the big selloff seen in the past few weeks. The break
below the swing low at $77.70 switched the market structure to a downtrend,
which is also supported by the moving averages being
crossed to the downside. If Crude Oil manages to rise even more, the sellers
will look to short at the trendline where
they will have the confluence with the
red 21 moving average and the 50% Fibonacci retracement level.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the sellers
leant on the minor trendline and the 50% Fibonacci retracement level to
position for a drop into new lows. The buyers will need the price to break
above the trendline to increase the bullish bets into the major trendline, and
eventually target a break above the $83 resistance to
switch the bias from bearish to bullish.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
had a divergence with
the MACD right
at the trendline, which is generally a sign of weakening momentum often
followed by pullbacks or reversals. In this case, it was another layer of
confluence for the sellers to position for further downside. If the price
breaks below the $77.70 level and the counter-trendline, the sellers will
increase the bearish bets and we will likely see new lows.

Upcoming Events

Today, we have the US Retail Sales and PPI data with
the market likely giving more importance to the Retail Sales data. Tomorrow, we
will see the latest US Jobless Claims figures where the market will want to see
how fast the labour market is softening. Weak data is likely to weigh on Crude
Oil as the recessionary fears will keep on growing. On the other hand, strong
figures should support the market in the short term.

See the video below