Crude Oil Forecast: Oil Erases October Rally- Key Support in View
Crude Oil Technical Forecast: WTI Weekly, Daily & Intraday Trade Levels
- Oil prices erase October rally- plunge nearly 15% off monthly high
- WTI approaching key support at yearly lows into monthly cross- risk for price inflection
- Resistance 69.32, ~70.40s, 71.33/93 (key)- Support 65.62-66.31 (key), 63.63, 59.16-63.31
Crude oil prices have pared the entire October rally with WTI plunging more than 14.9% off the monthly high. The sell-off takes oil back towards key technical support at the yearly lows and the focus is on a possible price inflection off this zone in the days ahead. Battle lines drawn 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 had turned from confluent resistance and that we were on the, “lookout for an exhaustion low in the days ahead. From a trading standpoint, losses should be limited to 70.29 / the lower parallel IF price is heading higher on this stretch with a close above 78 needed to mark resumption.” Oil prices plunged through support later that week with a close below the objective yearly-open once again approaching critical support at 65.62-66.31- a region defined by the 2020 swing high, the September low-day close (LDC), the 2023 close low, and the objective monthly low. We’re on the lookout for a possible reaction into this threshold IF reached in the days ahead.
Oil Price Chart – WTI Daily
Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView
A look at the daily chart shows WTI trading within the confines of a descending pitchfork extending of the July high. Note that the 25% parallel converges on the 65.62-66.31 support zone and further highlights the technical significance of this region into the close of the month. A break / close below this threshold exposes subsequent support objectives at the 2023 low at 63.61 and the 2020 high-week close (HWC) / 100% extension of the 2023 decline at 59.16-60.31- look for a larger reaction there IF reached.
Oil Price Chart – WTI 240min
Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView
A closer look at oil price action shows oil trading within the confines of an embedded pitchfork with the lower parallel again highlighting key support. Initial resistance is eyed at the 100% extension of the monthly decline at 69.32 backed channel resistance (currently ~70.40s). Rallies should be limited to the yearly open / August low-day close at 71.33/93 IF oil is heading lower on this stretch. Broader bearish invalidation now lowered to the October high-day close (HDC) at 73.88.
Bottom line: The oil sell-off is approaching key technical support into the yearly lows and while the broader outlook remains weighted to the downside, the immediate decline may be vulnerable into this confluence zone. From at trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 65.62-66.31- rallies should be limited to the yearly open IF price is heading for a break lower with a close below this key pivot zone needed to fuel the next major leg in price.
Keep in mind that the ongoing turmoil in the Middle East remains a significant risk on the geopolitical side here with the key US inflation data and NFPs on tap into the November open. Stay nimble into the monthly cross and watch weekly close here for guidance.
We’ll review these charts in-depth in the Weekly Technical Outlook Webinar on Monday morning.Active Weekly Technical Charts
- Canadian Dollar (USD/CAD)
- Euro (EUR/USD)
- British Pound (GBP/USD)
- US Dollar Index (DXY)
- Australian Dollar (AUD/USD)
- Gold (XAU/USD)
- Japanese Yen (USD/JPY)
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @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.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.
FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.
FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.
GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2024