Crude oil price forecast: WTI spills into trend support

Crude Oil technical forecast: WTI weekly trade levels

Crude price breakout of multi-month consolidation takes price into downtrend support
Risk for near-term exhaustion within the broader downtrend
WTI resistance 71.47, 75.50s, 83.28 - support 65.92-66.57 (key), 59.16, 49.44

Crude oil prices plummeted more than 22% off the January highs with WTI now testing a key pivot zone at downtrend support. The battle lines are drawn heading into the FOMC rate decision this week. These are the updated targets and invalidation levels that matter on the WTI weekly technical chart.

Discuss this crude oil setup and more in the Weekly Strategy Webinars on Monday’s at 8:30am EST.

Crude Oil Price Chart – WTI Weekly

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

Technical Outlook: In our last Crude Oil price forecast we noted that WTI was poised for a breakout of a massive multi-month consolidation pattern, “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.” Oil plunged more than 20% off the monthly highs last week with the decline registering an intraday low today at 64.10- watch the weekly close.

A break below the lower parallel (blue) would keep the focus on subsequent support objectives 59.16, the 61.8% Fibonacci retracement of the 2020 (zero-rally) at 49.43 and the 2017 low / low-close at 42/43- and area of interest for possible downside exhaustion / price inflection IF reached.

Initial weekly resistance now eyed at the 2022 channel line (currently ~75.50s) with broader bearish invalidation lowered to the median-line / 2021 high-week close at 83.28.

Bottom line: Oil prices have plummeted into downtrend support and we're looking for a reaction down here- watch the weekly close for guidance. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – rallies should be limited to the last-week’s highs IF price is indeed heading lower here. Use caution- a break below this slope could fuel another accelerated sell-off. I’ll publish an updated crude oil short-term outlook once we get further clarity on the near-term WTI technical trade levels.

Active Weekly Technical Charts

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

Follow Michael on Twitter @MBForex

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.