Crude Oil Technical Outlook: Levels to Watch as OPEC+ Meeting Looms

CRUDE OIL PRICE WEEKLY TECHNICAL FORECAST – NEUTRAL

• Crude oil prices oscillated -1% lower this past week though volatility continues to accelerate
• Oil price action appears to be searching for technical support following a healthy correction
• The upcoming OPEC+ meeting likely stands to determine where crude oil prices head next
• Refine your technical analysis, learn about WTI vs Brent, or check out this oil trading guide

Crude oil ended slightly lower on the week with prices dropping roughly -1% to $60.72/bbl. Oil price action was quite volatile over the last few sessions, however, as the commodity fluctuated within an 8% trading range. In fact, the 14-day average true range accelerated to its highest level since June of last year. Recent crude oil price volatility looks likely to persist in light of fundamental risk posed by the upcoming OPEC+ meeting scheduled to take place on 01 April 2021, which stands to guide the direction of oil. This brings to focus key technical support and resistance levels worth watching out for in the week ahead.

CRUDE OIL PRICE CHART: DAILY TIME FRAME (16 OCT 2020 TO 26 MAR 2021)

Chart by @RichDvorakFX created using TradingView

Crude oil prices have been broadly under pressure since topping out at a big area of confluence near $68.00/bbl earlier this month. Negative divergence on the relative strength index was hinting at pullback potential, and the commodity has subsequently carved out a string of lower highs over the last three weeks. This led to a bearish break of the ascending trendline that extends through the 02 November 2020 and 01 February 2021 swing lows. Oil price action looks like it is attempting to base around the $57.50-level, however, as bulls defend the bottom Bollinger Band and 50-day simple moving average.

A breakdown of this technical support level could coincide with a deeper reversal toward the $52.00-handle and 100-day simple moving average. On the other hand, reclaiming and flattening out the negatively-sloped 8-day simple moving average might suggest the corrective phase is at wits’ end. The $63.50-price level could undermine potential rebound efforts made by crude oil, though. This possible ceiling is highlighted by last month’s high. Eclipsing this technical barrier could bring the upper Bollinger Band into focus, and perhaps even fresh year-to-date highs.

Keep Reading – 8 Surprising Crude Oil Facts Every Trader Should Know

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight