Oil Price Technical Forecast: WTI Plunges into Yearly Open Support

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

• Oil price plummet 10.8% off monthly high- poised to snap four-day losing streak
• WTI responding to yearly-open support- threat for exhaustion / price inflection
• Resistance 79.60, 82.39, 83.30- Support 76.90, 74.90-75.42 (key), 72.45/99

Oil prices plunged nearly 11% off the August highs with WTI now testing major technical support at the objective yearly open. We’re on the lookout for possible downside exhaustion / price inflection off this mark in the days ahead with the immediate short-bias vulnerable while above. 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 my last Oil Price Forecast we noted that WTI was, “responded to confluent downtrend resistance and the focus is on this pullback. From a trading standpoint, losses should be limited to 74.90 IF price is heading higher on this stretch with a close above 75.690 needed to fuel the next leg in price.” That day marked the monthly high in oil with WTI plunging back towards critical support this week at the 2023 trendline- we’re looking for possible inflection off this mark with the immediate decline vulnerable while above.

Oil Price Chart – WTI Daily

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

A look at the daily chart shows WTI continuing to trade within the confines of the descending pitchfork formation we’ve been tracking off the July high with oil dropping into confluent support yesterday at 71.33/96- a region define by the objective 2024 yearly open and the 78.6% Fibonacci retracement of the 2023 advance. A break / weekly close below this threshold would threaten a breakout of the multi-year consolidation pattern and will be needed to mark resumption of the April downtrend.

Oil Price Chart – WTI 240min

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

A closer look at oil price action highlights near-term support here at 71.33/96. Look for initial resistance at the July low-day close (LDC) / August 7^th reversal close at 75.25/42 backed by the 61.8% retracement at 76.82. Ultimately, a breach / close above the 200-day moving average (currently ~77.91) would be needed to suggest a more significant low is in place.

A daily / weekly close below this key threshold would threaten another bout of accelerated losses with subsequent support objectives eyed at the December LDC at 69.84 and the 2023 LDC at 68.59. The next major technical inflection zone is eyed down at 65.62-66.57- look for a larger reaction there IF reached.

Bottom line: Oil plunged into the lower bounds of a multi-year consolidation pattern with the bulls defending yearly-open support this week- the focus is on possible inflection off this pivot zone. From a trading standpoint, a good region to reduce short-exposure / lower protective stops – rallies would need to be limited to the 200DMA IF price is heading lower on this stretch with a close below the yearly open needed to fuel the next leg. We’ll review these charts in-depth in the Weekly Technical Outlook Webinar on Monday morning.

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

Follow Michael on X @MBForex