Oil Price Forecast: Oil Bears Reassert Control– Crude Support in View

Crude Oil Technical Forecast: WTI Weekly, Daily & Intraday Trade Levels

Oil prices turn from 2024 yearly open resistance- plunges nearly 3.8% on the week.
WTI approaching key support near yearly lows- risk for price inflection ahead.
Resistance 70.44/59, 71.93-72.46, 73.88/96 (key)- Support 67.48, 65.62-66.31 (key), 63.63

Crude oil prices turned from confluent resistance this week with WTI threatening resumption of the July downtrend. The focus is on a breakout of a multi-month range with the bears looking to make another test of key support near the yearly lows. Battle lines drawn on the weekly, daily, and 240min WTI technical charts.

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Oil Price Chart – WTI Weekly

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

Technical Outlook: In my last Oil Price Forecast, we noted that WTI was approaching the lower bounds of a multi-week range and “A good zone to reduce portions of short-exposure / lower protective stops- look for a reaction on a stretch towards key support near the 66-handle.” WTI registered an intraday low the following week at 66.58 before reversing sharply higher with an outside-week reversal keeping the focus on a breakout of the weekly range (66.58-71.42).

Note that critical support rests just lower with the 2020-high / 2023 close low / 2024 low-day close (LDC) at 65.62-66.31- a break / weekly close below this threshold would be needed to validate a breakout of the 2023 consolidation pattern. The next major weekly support zone rests with the 2020 high-week close (HWC) / 100% extension of the 2023 decline at 59.16-60.31. Key weekly resistance remains unchanged with the objective yearly open at 71.33.

Oil Price Chart – WTI Daily

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

A look at the oil daily chart shows WTI continuing to trade within the confines of the descending pitchfork extending off the July high. Note that price turned from the 75% parallel yesterday with the bears now testing initial support at the 61.8% retracement / November low-day close (LDC) at 68.46-69.05- watch today’s close.

Oil Price Chart – WTI 240min

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

A closer look at oil price action shows WTI attempting to break support in New York trade. Subsequent support rests around the 88.6% retracement at 67.15 with a break / close below 65.62 needed to validate a larger break towards the 2023 low at 63.63 and the 100% extension at 60.31.

Initial resistance 71.33 backed by the August LDC / June low at 71.92-72.45. Broader bearish invalidation now lowered to the October HDC / 61.8% retracement of the October decline at 73.87/91.

Bottom line: The oil remains vulnerable to further losses here after turning from downtrend resistance with a break below the median-line needed fuel the next test of range support. From a trading standpoint, the immediate focus is on a breakout of last-week’s range- rallies should be limited to the yearly open IF price is heading for a break lower with a close below 65.62 needed to fuel the next major leg of the decline.

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

Follow Michael on X @MBForex

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