Oil Price Forecast: WTI at Major Support – Crude Break Could Fuel Collapse – DailyFX | Jewelry Dukan

Crude Oil Technical Forecast: WTI-Weekly Trading Levels

  • Crude Oil updated technical trading levels – weekly chart
  • WTI tumbles to critical support point on seventh weekly test – risk of a reversal from 83.28-87.15
  • New to oil trading? Start with this free one How to Trade Oil – Beginner’s Guide

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Crude oil prices plunged nearly 17% from August highs, with WTI attempting to mark a third straight weekly decline on Friday. Despite the losses, the price has continued to hold above/within a critical support zone and our focus in the coming days has been on a swing from this key level. This remains a BIG moment for Crude Oil. These are the updated targets and invalidity levels of significance on the weekly oil price technical chart. Watch my latest strategy webinar for a detailed breakdown of this technical construction of crude oil prices and more.

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Crude Oil Price Chart – WTI Weekly

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Chart Prepared by Michael Boutros, Technical Strategist; Crude Oil (WTI) on Tradingview

Remarks: In my last weekly Technical Oil Price Forecast, we noted that WTI “was back in a critical support zone in a major reversal zone earlier in the month. Focus remains on a reaction from this key level into September – watch the weekly close.” The zone of focus was 85.61-88.01 and the price has failed to close below this level for the last seven weeks. . . A closer review of the price action prompts us to change this key zone again 83.28-87.15 – a region defined by the weekly high of 2021, the low of 2013 and the 100% extension of the yearly decline. The technical importance of this confluent pivot zone cannot be underestimated, and a tight low below it could trigger another accelerated loss spurt. However, the immediate underside remains vulnerable as long as it is within/above this key range.

A break to the downside will expose the first major support target at the year open 2022/2018 high 75.35-76.87 helped by the August 2018 weekly close low/2019 high 65.92-66.57– reached both areas of interest for a possible short-term exhaustion IF. Weekly resistance stands parallel to the 52-week moving average / 25% (currently ~92.88) with wider bearish Invalidation now lowered to the 38.2% Fibonacci retracement of the June decline 94.40.

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bottom line: Oil prices have been testing a critical support point for over a month and the focus remains on a possible reversal into this zone. From a trading perspective, rallies should be capped by the 52-week moving average if the price is trending down this stretch, with a close below needed to fuel the next downtrend in WTI. We remain cautious here – this is a high level and a significant price resolution may be imminent. I will post an updated near-term technical outlook for Crude Oil prices once we have further clarity on near-term WTI trading levels.

For a full breakdown of Michael’s trading strategy, see his Series Fundamentals of technical analysis to build a trading strategy

Crude Oil Traders Sentiment – WTI Price Chart

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  • A summary of IG customer mood shows that traders are net long Crude Oil – the ratio is +2.10 (67.74% of traders are long) – typically bearish read
  • Long positions are 16.83% higher than yesterday and 13.73% lower than last week
  • Short positions are 10.52% lower than yesterday and 4.43% higher than last week
  • We typically view crowd sentiment as contradictory and the fact that traders are net long suggests that oil US crude prices could fall further. Traders are net-longer than yesterday but less net-long than last week. The combination of current positioning and recent changes gives us another mixed WTI trading bias from a sentiment perspective.




of customers are net long.




of customers are mesh short.

change into

longs

Shorts

Oi

Daily -8th% 4% -5%
Weekly -10% -14% -11%

Active weekly technical charts

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— Written by Michael Boutros, Technical Strategist at DailyFX

Follow Michael on Twitter @MBForex

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