WTI Crude Oil Technical Analysis | Forexlive

Crude Oil sold off last
week following the disappointing OPEC+ meeting where they failed to agree on a
group cut and proceeded with voluntary output cuts of about 2.2 million bpd. The other
bearish catalysts include the latest Baker Hughes weekly count where US oil rigs rose
continuing to point to expanding US production. All of the above coupled with
the weakening demand outlook caused by the restrictive monetary policies and
softening economic data continue to support the downtrend in Crude Oil with the
cycle lows being the natural target.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil pulled
back into the 38.2% Fibonacci retracement level
near the key trendline and sold
off ever since as the OPEC+ decision underdelivered on expectations. The bias
remains strongly bearish with the price printing lower lows and lower highs and
the moving averages being
crossed to the downside. The next target for the sellers should be the cycle
low around the $64 level.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price is
struggling a bit breaking decisively below the recent low at $72.50. We might
get a little pullback from this level after the recent selloff. The buyers
might lean on this level with a defined risk below it to position for a rally
back into the major trendline. The sellers, on the other hand, should take
advantage of the likely bounce to short again at better levels targeting a
break below the low.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a divergence with
the MACD right
at the low. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we might see a bounce into the recent $74
resistance where
the sellers should pile in with a defined risk above it to position for a break
below the low. The buyers, on the other hand, will want to see the price
breaking higher to increase the bullish bets into the major trendline.

Upcoming Events

Today we have another US labour market report with
the release of the US ADP data. Tomorrow, it will be the time for the US
Jobless Claims figures, while on Friday we conclude the week with the NFP
report. Weak data is likely to weigh on Crude Oil as fears of a recession would
dampen the demand outlook even more. On the other hand, strong figures should
provide some support in the short-term.

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