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.

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