Oil Price Technical Forecast: Oil Spills Sub-75, WTI Support in View

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

• Oil prices plummet to multi-week lows– poised to mark fourth-weekly decline
• WTI approaching multi-month consolidation support- risk for exhaustion / price inflection
• Resistance 77.06, ~78.40, 81.47 (key)- Support 74.29, 72.99, 71.33 (key)

Oil prices plunged more than 11.5% off the July high with a four-week decline now approaching technical support. We’re on the lookout for possible price inflection as the bears attempt to break a multi-month consolidation pattern in WTI. The battle lines are drawn heading into the close of the month as we take a multi-timeframe view at the oil market. These are the updated targets and invalidation levels that matter on the weekly, daily, and 240min WTI technical charts.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this crude oil setup and more. Join live on Monday’s at 8:30am EST.

Oil Price Chart – WTI Weekly

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

Technical Outlook: In last month’s Oil Price Forecast we noted that WTI had, “rallied into the first major technical hurdle with key resistance eyed just higher.” The specific zone in focus was “at 84.15-85.33- a region defined by the 2021 high-close (HC), the 61.8% retracement of the 2023 decline, and the 2024 high-day & high-week closes (HDC / HWC).” Oil briefly registered an intraday high at 84.50 before turning sharply lower with WTI now poised to mark a fourth consecutive weekly decline. The decline takes price back below the 52-week & 200-day moving averages and the immediate focus is on a reaction into the lower bounds of this multi-year consolidation formation.

Oil Price Chart – WTI Daily

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

The daily chart shows WTI trading within the confines of a proposed descending pitchfork formation extending off the yearly highs with the median-line highlighting confluent support at the June 6 reversal close around 74.29 and the yearly low-day close (LDC) at 72.99- both levels of interest for possible downside exhaustion / price inflection IF reached. Ultimately, a break / daily close below the 2024 yearly open at 71.33 would be needed to fuel the next major leg lower in price with subsequent support objectives seen at the December low-day close (LDC) at 69.84 and the 2023 LDC at 68.59.

Oil Price Chart – WTI 240min

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

A closer look at oil price action shows WTI trading within an embedded channel off the late-July high with the lower parallel (red) further highlighting near-term support near 74.29. Initial resistance is eyed back at the 61.8% Fibonacci retracement at 77.06 and is backed closely by the 200-DMA (currently ~78.40)- rallies would need to be capped by this threshold IF price is heading lower on this stretch. Broader bearish invalidation now lowered to the objective monthly open at 81.47.

Bottom line: The oil sell-off is approaching major support hurdles into multi-month consolidation support- risk for downside exhaustion / price inflection just lower. From a trading standpoint, look to reduce portions of short-exposure / lower protective stops on a test of the 2023 trendline near ~73- rallies should be capped by the 200-day moving average IF price is heading lower on this stretch with a close below the yearly open needed to mark downtrend resumption.

Keep in mind the FOMC rate decision is on tap tomorrow with Non-Farm Payrolls (NFP) slated for Friday. As always, stay nimble into the monthly cross and watch the weekly close here for guidance.

We’ll review these charts in-depth in the Weekly Technical Outlook Webinar on Monday.

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

Follow Michael on X @MBForex