Oil Price Forecast: WTI Rally at Risk into Resistance
Oil surged into the July open with WTI now approaching resistance near the 200-day moving average. A multi-timeframe view of the oil technical charts.
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Crude Oil Technical Forecast: WTI Weekly, Daily & Intraday Trade Levels
- Oil prices plunge more than 16% from June high as tensions ease in the Middle Eastern
- WTI rebounds into July open- monthly / weekly opening-ranges in focus
- Risk for exhaustion / price infection into upcoming resistance
- Resistance 69.20, 71.90-72.42 (key), 75.27/67- Support 65.62-66.31, 63.83 (key), 62.70
Crude oil prices saw a massive spike in volatility last month amid rising tensions in the Middle East with WTI surging to five-month highs before exhausting into trend resistance. The pullback rebounded off trend support last week with a 6.1% rally into the start of July now approaching initial resistance. Battle lines drawn on the weekly, daily, and 240min technical charts.
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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 was, “testing a major resistance pivot today and the focus is on this week’s close with respect to the 65.62-66.31 pivot zone. From a trading standpoint, a good region to reduce portions of long-exposure / raise protective stops- losses should be limited to 62.70 IF price is heading higher on this stretch with a close above 66.31 needed to fuel the next leg of the May advance.” WTI closed well above pivot resistance that day with the Oil rally extending a staggering 27% off the June open before exhausting into multi-year downtrend resistance at the upper parallel.
Crude plunged more than 17.5% off those highs with price rebounding off Fibonacci support into the close of June. The immediate focus is on this recovery with price now approaching resistance at the yearly moving average (52-week) / 75% parallel. Risk for topside exhaustion / price inflection in the days ahead- look for a breakout of the weekly opening-range.
Oil Price Chart – WTI Daily
Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView
A look at the WTI daily chart shows an early-month rebound off the May trendline with the advance attempting to push through the 200-day moving average today. Initial resistance eyed with the 38.2% retracement of the June decline at 69.20 and is backed closely by the 75% parallel. A breach / close above this slope is needed to suggest a more significant rebound is underway. Subsequent objectives eyed at the yearly open / 61.8% retracement at 71.90-72.42 with key resistance / broader bearish invalidation at 75.27/67- a region defined by the 78.6% retracement and the June high-day close (HDC).
Oil Price Chart – WTI 240min
Chart Prepared by Michael Boutros, Technical Strategist; WTI on TradingView
A closer look at oil price action shows WTI carving the weekly opening-range just above support at the 2020 high / 2023 close low at 65.62-66.31. Ultimately, a break below the median-line / 61.8% retracement at 63.83 is needed to mark resumption of the broader downtrend. Subsequent support objectives seen at the low-day close (LDC) at 62.70 and the June open / low-week close (LWC) at 60.77-61.45- note that losses below this threshold would threaten another bout of accelerated losses toward the yearly low-close at 57.20.
Bottom line: Last month’s geopolitically fueled oil rally failed at yearly downtrend resistance with price rebounding off the median-line into the July open. The immediate focus is on a breakout of the weekly opening-range (65.62-69.20) for guidance. From a trading standpoint, rallies should be limited to the yearly open IF price is heading lower on this stretch with a close below 63.83 needed mark downtrend resumption.
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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
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