Crude oil price forecast: WTI bulls eye breakout at 2023 range high

Crude Oil technical forecast: WTI weekly trade levels

• Crude rebounds sharply off technical downtrend support
• Three-week rally now eyeing resistance at yearly range-highs
• WTI resistance 83.28, 88.84-89.05 (major), 94 - support ~75, 71.47 (key) 65.92-66.57

Crude oil has rallied for the past three-weeks with a rebound off technical support now challenging the objective yearly opening-range highs. Is a low in place for WTI? These are the updated targets and invalidation levels that matter on the oil 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: In last month’s Crude Oil price forecast we noted that WTI had, “plummeted into downtrend support and we’re looking for a reaction down here- watch the weekly close for guidance.” Price held above confluent support that week at the August 2018 low-week close / 2019 high at 65.92-66.57 with a three-week rally surging more than 27% off the yearly low.

The advance is testing initial resistance this week at the November trendline (red) with key resistance unchanged at median-line / 2021 high-week close at 83.28. A breach / weekly close above this threshold would be needed to suggest amore significant low was registered last month with such a scenario exposing the 52-week moving average / 38.2% Fibonacci retracement of the 2022 decline at 88.84-89.05- look for a larger reaction there IF reached.

Weekly support now rests back with the December consolidation slope (currently ~75) backed by the 2022 low-week close at 71.47- losses should be limited to this threshold IF price is heading higher on this stretch. Note that losses below 65.92 could fuel another accelerated sell-off with such a scenario exposing the 2020 high-week close near the 59-handle.

Bottom line: Oil prices have rebounded sharply off downtrend support with the rally now approaching the objective yearly opening-range highs. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – ultimately a breach / close above 83.28 is 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

Follow Michael on Twitter @MBForex