Crude Oil Technical Forecast: WTI Weekly Trade Levels

  • Crude Oil updated technical trade levels – Weekly Chart
  • WTIrebounds off key support pivot evidence ofbear-market rebound or trend resumption?
  • New to Oil Trading? Get started with this Free How to Trade Oil-Beginners Guide

Crude oil prices surged more than 5% since the start of the week with WTI rebounding of a critical support pivot we’ve been tracking for months now- is the correction over? These are the updated targets and invalidation levels that matter on the oil price weekly technical chart. Review my latest Strategy Webinar for an in-depth breakdown of this crude oil price technical setup and more.

Crude Oil Price Chart – WTI Weekly

Crude Oil Price Chart - WTI Weekly - USOil Trade Outlook - CL Technical Forecast

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

Notes: In last month’s Crude Oil Weekly Technical Forecast we noted that, “Heading into the August open the focus remains on confirming a potential exhaustion low off one of these levels in the weeks ahead IF the broader multi-year oil uptrend is to remain viable.” The area in focus was 85.61-88.01– a region defined by the 2013 low, the 100% extension of the March decline and the 61.8.% retracement of the November advance. WTI is registered a low at 87 last week before rebounding sharply with oil rallying nearly 5% this week – is a near-term low in place?

While it’s too early to ascertain, the battle-lines are clear heading into weekly close. Initial weekly resistance stands at 95 backed by the median-line / 38.2% Fibonacci retracement of the June decline at 101 – broader bearish invalidation now lowered to the June high-week reversal close / 61.8% retracement at 109.65-110. Caution: a break below this critical support pivot would pose significant downside risk with such a scenario exposing the 2018 high / 2011 low / objective yearly open at 75-76.87.

Bottom line: Oil prices have rebounded of a critical support pivot and we’re looking for continued inflection off this mark for guidance. While we cannot rule out another test of the 2020/2021 uptrend, the focus is on validating a medium-term low in the weeks ahead. From a trading standpoint, losses should be limited to the monthly low-day close at 88.52 IF price is heading higher on this stretch with a close above the objective monthly open at 98.27 needed to clear the way for a larger advance. Review my latest Crude Oil Short-term Technical Outlook for a closer look at the near-term WTI technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Crude Oil Trader Sentiment – WTI Price Chart

Crude Oil Trader Sentiment - WTI Price Chart - USOil Retail Positioning - CL Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-long crude oil – the ratio stands at +2.05 (67.18% of traders are long) – typically bearishreading
  • Long positions are5.29% lower than yesterday and 10.05% lower from last week
  • Short positions are11.13% higher than yesterday and 26.32% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests crude oil prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. From a sentiment standpoint, the recent changes in positioning warn that the current WTI price trend may soon reverse higher despite the fact traders remain net-long.

Active Weekly Technical Charts

— Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

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