Crude Oil Technical Forecast: Oil Spill Searches Support

Crude Oil Technical Forecast: WTI Weekly, Daily & Intraday Trade Levels

Oil prices poised to mark outside-daily reversal off technical resistance- threat for further losses
Key support levels now in view- focus on possible exhaustion lows in the days ahead
Resistance 74.68, 77.15-78.02 (key), 80.15/39- Support 71.33/93, 70.29, 68.28 (key)

Oil prices plunged more than 7.3% off fresh monthly highs today with WTI reversing sharply off major technical resistance. The focus is on this pullback and the losses will need to be limited to upcoming support for the September uptrend to remain viable. Battle lines drawn on the weekly, daily, and 240min WTI technical charts.

Oil Price Chart – WTI Weekly

Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView

Technical Outlook: In last month’s Oil Price Forecast, we noted that WTI had rebounded off key lateral support, “at 65.62-66.31- a region defined by the 2020 swing high and the 2023 close low.” The focus was on possible inflection into the yearly open with, “the immediate rally vulnerable while below 71.33-72.45- a region defined by the objective 2024 yearly open, the August low-day close (LDC) and the June swing low.”

Crude oil plunged the following days with WTI testing key support again into the October open before mounting a massive offensive with the bulls starting the month with an outside-day / outside-week reversal off the lows. The subsequent rally extending more than 20.2% off the lows before exhausting today with price now poised to mark an outside-day reversal to the downside off resistance. Threat for some further losses near-term but we’re looking for support just lower.

Oil Price Chart – WTI Daily

Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView

A look at the daily chart shows the magnitude of today’s outside-reversal candle with WTI poised to mark the larges daily range since May 4, 2023- the day the yearly low was registered. The immediate focus is on this pullback – watch the close with regards to the 2013 trendline for guidance.

Oil Price Chart – WTI 240min

Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView

A closer look at oil price action highlights a newly identified upslope off the September / October low with the upper parallel further highlighting key resistance at 77.15-78.02- a region defined by the 61.8% retracement of the July decline, the 52 week & 200 day moving averages, and the 1.618% extension of the September advance. Initial resistance eyed at the weekly open (74.68) with a breach / close above the upper parallel needed to mark uptrend resumption towards the next major resistance hurdle at 80.15/39- look for a larger reaction there IF reached.

Initial support rests with the median-line (currently ~72.90s) and is backed closely by the yearly open / August low-day close (LDC) at 71.33/93 and the 61.8% retracement at 70.29- both levels of interest for possible downside exhaustion / price inflection IF reached. Ultimately, a break / close below the October open at 68.28 would be needed to shift the focus back towards key support again (bullish invalidation).

Bottom line: A massive reversal / rally off key support is responding to the major pivot zone and while the medium-term focus is still constructive, the risk remains for further losses near-term. We’re on the lookout for an exhaustion low in the days ahead. From a trading standpoint, losses should be limited to 70.29 / the lower parallel IF price is heading higher on this stretch with a close above 78 needed to mark resumption. As always, watch the weekly close here for guidance.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex

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