WTI Crude Oil Technical Analysis | Forexlive

Crude Oil broke through the
key $83 resistance following the strong US ISM Manufacturing PMI last week and pulled back at the
start of this week as we haven’t seen any escalation between Israel and Iran
and we even got talks of a possible ceasefire between Israel and Hamas. For
now, the fundamentals support more upside for Crude Oil as we are seeing a
reacceleration in economic activity and the pickup in China’s performance seems
to be gathering steam.

WTI Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil broke
the upper bound of the rising channel and extended the rally into the $87.50
level. This breakout should point to further gains ahead with the $90 level as
the next target. The price pulled back to retest the broken channel recently
and we can expect the buyers to step in around these levels to position for
another rally into new highs. The sellers, on the other hand, will want to see
the price falling back below the key $83 support to
position for a drop back into the lower bound of the channel.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the $83 support where we can find the confluence of the daily
red 21 moving average, the
upward trendline and the 61.8%
Fibonacci retracement level. The
buyers though are already using the 38.2% Fibonacci retracement level as
support to position for new highs, but if the price were to break below it, we
can expect them to pile in around the $83 support.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price action after the breakout of the channel diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it should signal a pullback into the trendline, although
the price found strong support around the 38.2% Fibonacci retracement level. We
got stuck in a consolidation between the Fibonacci level and the black
counter-trendline. A break to the upside should see the buyers increase the
bullish bets and extending the rally into new highs. On the other hand, a break
to the downside will see the sellers piling in to position for a break below
the $83 support with a better risk to reward setup.

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