WTI Crude Oil Technical Analysis | Forexlive

Crude Oil has been rallying
quite steadily since last Wednesday as the surprisingly dovish FOMC decision
triggered a “buy everything” type of reaction in the markets. The easing in
financial conditions decreased some concerns around demand and led to an
extended pullback in Crude Oil with traders assigning some risk of another
inflationary impulse in the coming months. The market is also adding some
geopolitical risk premium due to the attacks in the Red Sea by Yemen’s Houthi
militants that could disrupt the supply side, although the US has already
launched a multinational task force to safeguard the Red Sea commerce.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil is
now close to a key resistance zone
where we can find the confluence with the
trendline, the
61.8% Fibonacci retracement level
and the red 21 moving average. This is
where the sellers are likely to step in with a defined risk above the trendline
to position for another drop into the $64 support. The buyers, on the other
hand, will want to see the price breaking higher to invalidate the bearish
setup and extend the rally into the $80 level.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we had a divergence with the
MACD around
the $68 level which is generally a sign of weakening momentum often followed by
pullbacks or reversals. The price recently broke above the resistance zone
around the $72 level, retested it and continued higher into the trendline. We
now have an upward trendline supporting the current uptrend where the buyers
are likely to lean onto as they will also have the red 21 moving average for
confluence.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that on
this timeframe the price has been diverging with the MACD since the break above
the $72 resistance. This might be another bearish confluence for the sellers
signalling a possible reversal right around the major trendline. If the price
breaks further below the minor upward trendline, the sellers will increase the
bearish bets into the $64 support.

Upcoming Events

This week is a bit empty on the data front as we head
into the Christmas holidays. Today, we have the US Consumer Confidence report. Tomorrow,
we get the latest US Jobless Claims data, while on Friday we conclude the week
with the US PCE report. Weak data is likely to weigh on Crude Oil due to demand
fears, while strong figures should keep on supporting the market.

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