Crude Weekly Price Outlook: Oil Price Crushed Into Support

In this series, we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Crude oil prices have collapsed nearly 40% from the October high with the decline now testing a critical long-term technical support confluence. Here are the key targets & invalidation levels that matter on the WTI weekly chart heading into the close of the year.

CRUDE OIL WEEKLY PRICE CHART (WTI)

(Click on image to enlarge)

Crude Oil Weekly Price Chart - WTI

Notes: In last month’s Crude Oil Weekly Technical Outlook we noted that the risk remained lower in price while below 55.21 with our focus on a, “more significant support zone at the median-line of the 2015/2016 slope / 61.8% retracement at 45.45-46.24.” Oil registered a low at 45.77 this week and the focus heading into the close of the year is on whether price can stabilize above this key confluence support threshold.

Interim resistance stands at 49.48 backed by the median-line, currently around ~52- a breach/close above this level would be needed to alleviate further pressure with such a scenario targeting 55.21 and key yearly open resistance at 60.06. A break lower from here would risk substantial losses for crude with subsequent support objectives eyed at the 2017 low-week close at 43.09 and the highlighted slope confluence near the 40-handle.

Bottom line: Crude is testing a Big level here at confluence Fibonacci support and leaves the broader short-bias vulnerable near-term while above 45.45. From a trading standpoint, a good spot to reduce short-exposure / lower protective stops. Look for some back-and-fill here but we’ll want to see weekly momentum recover from the oversold extremes before looking for opportunities on long-side. For now, keep an eye out for downside exhaustion while above this key zone.

CRUDE OIL TRADER SENTIMENT

1 2
View single page >> |

Disclosure: Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.