Crude oil price forecast: WTI breakout brewing

Crude Oil technical forecast: WTI weekly trade levels

• Crude prices in multi-month consolidation – breakout pending
• Oil rally approaching 2023 opening-range highs
• WTI resistance 81.90s, 83.28-84.78 (key), 92.83– support 73.40s, 71.47 (key), 66

Crude oil prices have carved a well-defined yearly opening-range with WTI poised for a breakout in the weeks ahead. These are the updated targets and invalidation levels that matter on the WTI weekly technical chart.

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Crude Oil Price Chart – WTI Weekly

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

Technical Outlook: Crude oil prices rebounded sharply off downtrend support (blue) in December of last year with a 17.9% rally off the lows failing in late-January. Since then, WTI has continued to trade within the confines of a massive multi-month consolidation pattern – we’re looking for the breakout to offer some guidance here in the weeks ahead.

Initial resistance stands with the December trendline (red- currently ~81.90s) backed by 83.28-84.78 – a region defined by the 2021 high-week close and the 100% extension of the late-December advance. A breach / weekly close above this threshold is needed to suggest a more significant low was registered last year and would expose initial resistance objectives at the 52-week moving average (currently ~91.80s) and the 38.2% Fibonacci retracement of the 2022 decline at 92.83.

Initial support rests with lower bounds (currently ~73.40s) with a break / weekly close below the 2022 low-week close at 71.47 needed to mark resumption of the broader downtrend towards the August 2018 low-week close / 2019 high at 65.92-66.57 and the lower parallel / 2020 high-week close at 59.16.

Bottom line: Oil prices are in consolidation just above downtrend support- breakout pending. From at trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards the median-line – losses should be limited to 71.47 IF price is indeed heading higher. 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

Follow Michael on Twitter @MBForex