WTI Crude Oil Technical Analysis | Forexlive

Crude Oil has been selling
off pretty heavily since the market switched its focus from the Hamas-Israel
conflict to the deteriorating economic data in the major economies. In fact, on
a forward-looking basis, the demand side is starting to look bleaker with the
PMIs contracting further and the US labour market now showing clearer signs of
weakness.

The last week, Crude Oil
started to rally as we got the news from OPEC+ sources that the group would consider
whether to deepen supply cuts. This is probably leading to a classic “buy the
rumour, sell the fact” trade with Oil prices rallying into the meeting with the
risk of a selloff on both a disappointment and a confirmation of the cuts,
unless of course they are very big.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil bounced
around the $72.50 level and erased almost all the losses of the selloff from
the $80.00 level. The bias remains bearish as the price has been printing lower
lows and lower highs with the moving averages being
crossed to the downside. We can expect the sellers to pile in around the $80.00
level again as they will also have the 38.2% Fibonacci retracement level
and the red 21 moving average for confluence.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the latest leg
lower diverged with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the break above the minor trendline suggests
that we might get a reversal all the way up to the major trendline around the
$82.00 level, but the buyers will first need to break above the resistance around
the $80.00 level before eyeing the major trendline.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price has been consolidating around the $77.70 level for the first part of the
week but we can expect more upside into the OPEC meeting early next week. A
rally into the $80.00 level is likely to lead to a divergence with the MACD, so
what happens at that resistance will be key.

Upcoming Events

Today we will get the latest US Jobless Claims report
which is probably going to be the most important release of the week. Tomorrow,
the US will be on holiday for Thanksgiving Day and therefore the liquidity in
the market will be thinner. On Friday, we conclude the week with the latest US
PMIs. Weak US data is likely to weigh on Crude Oil as the market might be
bringing the expectations for a recession forward. On the other hand, strong
data might support the market in the short term.