Oil Price Forecast: Crude Bears Wrestle with Key Support

Crude Oil Technical Forecast: WTI Weekly Trade Levels

Oil prices plunge more than 12% off yearly high- testing technical support for a third week
Crude marking divergence, unable to close week below support- bears may be vulnerable
WTI Resistance 78.89, 79.92-80.31, 81.52- Support 77.49/66, 75.31, 73.00/74

Oil prices were off more than 2.6% this week with WTI trading at 77.80 ahead of the New York close on Friday. Crude has been trading within a 4.5% range since the initial May sell-off with multiple attempts to break support failing to mark a weekly close below. The battle lines are drawn heading into the close of the month with the bulls struggling to hold the last line of defense. These are the updated targets and invalidation levels that matter on the WTI weekly & daily technical charts heading into next week.

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 the, “oil price correction is approaching key support objectives and we’re on the lookout for a possible exhaustion low in the days ahead. From a trading standpoint, losses should be limited to 77.66 for the yearly uptrend to remain viable with a breach / weekly close above the objective May open needed validate a breakout of the April downtrend.” Oil prices have been testing this support zone for the past three- weeks and while we’ve seen multiple daily closes, the weekly close continues to respect this support for now.

Oil Price Chart – WTI Daily

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

A closer look at WTI price action shows oil continuing to trade within the confines of a multi-week descending channel formation extending off the yearly highs with price turning sharply lower from confluent resistance last week at 79.92-80.31- a region defined by the 200-day moving average, the 38.2% retracement of the December rally, and the objective 2023 yearly open. Ultimately, a breach / close above this threshold would be needed to invalidate the April downtrend. Initial resistance now eyed at the 61.8% Fibonacci retracement at of the most recent decline at 78.89.

A weekly close below this key pivot zone at 77.49/66 would threaten resumption towards the 61.8% retracement of the October advance at 75.31 and key support into the yearly low-day close at 72.99- both levels of interest for possible downside exhaustion / price inflection IF reached.

Bottom line: Oil has been trying to break this key support zone for the last three weeks with the bears unable to secure a weekly close below. From a trading standpoint, the threat remains lower while within this channel with a close below 77.49 needed to mark resumption. That said, we’re on the lookout for evidence of an exhaustion low in the days ahead IF price is attempting to put in a more significant bottom here with a close above 80.31 needed to invalidate the multi-week downtrend. Stay nimble into the monthly cross and watch the weekly close here for guidance.

Key Economic Data Releases

Active Weekly Technical Charts

--- 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. Products and services available depend on your location and the entity holding your account. 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.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.