Crude oil forecast: oil spill searches support- WTI bears eye 70

Crude Oil technical forecast: WTI weekly trade levels

• Crude reverses sharply off technical resistance- risk for exhaustion low in the weeks ahead
• Oil bears attempting third weekly decline - now approaching key technical pivot zone
• WTI resistance 82.68-83.28, ~87.23, 89.05- support ~69.19-71.47 (key), 65.92-66.57, 59.16

Crude oil plummeted from fresh yearly highs with WTI attempting a third consecutive weekly sell-off. The decline is now approaching a key pivot zone and we’re on the lookout for a possible exhaustion low in the days ahead- it’s make-or-break for the March rally. These are the updated targets and invalidation levels that matter on the oil weekly technical charts heading into May trade.

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Crude Oil Price Chart – WTI Weekly

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

Technical Outlook: In last month’s Crude Oil price forecast we noted that WTI was approaching the yearly highs with, “with key resistance unchanged at median-line / 2021 high-week close at 83.28.” Oil briefly registered an intraweek high at 83.51 before reversing sharply with a two-week sell-ff plunging nearly 11.5%. The focus is on a key technical pivot zone just lower and we’re on the lookout for a possible exhaustion low into heading into May.

Key support rests at 69.19-71.51 – a region defined by the yearly low-week reversal close, the 2022 low-week close, and the 61.8% Fibonacci retracement of the objective yearly range. Ultimately, a break / weekly close below the August 2018 low-week close / 2019 high at 65.92-66.57 is needed to mark resumption of the broader downtrend with such a scenario exposing the 2020 high-week close at 59.16.

Key resistance now eyed at the 2023/2021 high-week closes at 82.68-83.28 – a breach / weekly close above this threshold is needed to validate a breach of the median-line / yearly opening-range. Subsequent resistance objectives eyed at the 52-week moving average (currently ~87.23) and the 38.2% retracement of the 2022 decline at 89.05- look for a larger reaction there IF reached.

Bottom line: A turn from downtrend resistance is now approaching downtrend support. From a trading standpoint, losses should be limited by 69.19 IF price is indeed heading higher with a breach / close above 83.28 still needed to suggest a larger trend reversal is underway. I’ll publish an updated crude oil short-term outlook once we get further clarity on the near-term WTI technical trade levels.

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