WTI Crude Oil Price Analysis For June 18

WTI crude oil has broken down from a double top chart pattern on the daily time frame, as price sliced through the neckline support around the $80.00 area to confirm a bearish reversal from the earlier uptrend.

The commodity is currently trading around $74.69, well below the breakdown level, with the measured move target pointing to deeper losses near the $72.92 swing low.A pullback to the former neckline and nearby Fibonacci retracement levels could be in the cards before the selloff resumes, however.

The 38.2% Fib is located at $81.29, followed by the 50% level at $83.88. A larger correction could reach the 61.8% Fib at $86.46, which lines up with the lower highs on the descending triangle that preceded the breakdown, a confluence that could attract more sellers looking to join the downtrend at better prices.

On the moving averages front, the 100 SMA (blue) has crossed below the 200 SMA (red) for the first time since early last year, confirming that the path of least resistance has shifted to the downside. Both indicators are now well above current price levels, reinforcing their role as dynamic resistance on any corrective bounces.

Stochastic has plunged deep into oversold territory and is approaching its floor, suggesting that a short-term bounce or consolidation could be near. If the oscillator turns higher from current levels, it would likely correspond with a retest of the broken neckline or lower Fibonacci levels before sellers reassert control.

RSI has similarly tumbled to its lowest reading in months and is pressing against the oversold zone, leaving limited immediate downside momentum. A recovery in RSI toward the midpoint, though, could realign with a corrective pullback to the Fib retracement area before the broader bearish trend resumes.

The upcoming signing of the US-Iran deal on Friday continues to weigh on crude oil, as this would likely lead to the complete reopening of the Strait of Hormuz soon and freely flowing commodities back to the global economy.