Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Crude Oil Technical Forecast: WTI Price at Risk of a Brief and Moderate Pullback

Crude Oil Technical Forecast: WTI Price at Risk of a Brief and Moderate Pullback

Diego Colman,
What's on this page

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter


From a fundamental point of view, oil maintains a very positive medium-term outlook. The resilience of demand as the global economy recovers from the COVID-19 crisis, tight supplies amid OPEC+ reluctance to increase production quotas much faster, and falling inventories are all bullish catalysts for the crude market.

Another near-term tailwind is the global energy crisis. With coal prices near record levels and natural gas prohibitively expensive after its 2021 spike, some countries are temporarily switching to oil for power generation and heating, a situation that may boost demand for both WTI and Brent and provide further impetus. Against this backdrop, oil is likely to cruise higher during the latter part of the year, although the move will not follow a straight line, as new concerns about rising coronavirus cases in Russia, China and Germany may dent appetite for riskier assets from time to time.

Oil Forecast
Oil Forecast
Recommended by Diego Colman
Get Your Free Oil Forecast
Get My Guide

From a technical standpoint, the WTI oil structure is also quite bullish, with price trading above key SMAs and printing higher highs and higher lows in an impeccable fashion since last year. Even though the current pattern points to further upside, traders should exercise caution for two reasons:

  1. price is approaching critical resistance near the $84.00 psychological mark
  2. the 14-week RSI currently offers an extreme overbought reading as shown in the chart below


Source: TradingView

The two factors mentioned above may create the right conditions for a brief pullback and subsequent sideways consolidation before the next leg higher. That said, traders should prepare for a possible retreat towards $80 and wobbly price action around those levels over the next week. In the event of a larger pullback, the first support to watch for appears at $80.75, followed by $79.80/79.40. A move below this floor could accelerate selling pressure and trigger a correction towards a rising trendline extended from the August lows, which now crosses the $77.50 region.


Source: TradingView

Alternatively, if oil does not take a breather and continues to charge higher undeterred by stretched positioning, it is imperative to surveil how price reacts in the $84 area as a decisive climb above this barrier could pave the way for a sustained rally towards $91.00, the next technical resistance to monitor (see weekly chart).

How to Trade Oil
How to Trade Oil
Recommended by Diego Colman
How to Trade Oil
Get My Guide


  • Are you just getting started? Download our beginners’ guide for FX traders
  • Would you like to know more about your trading personality? Take our quiz and find out
  • IG's client positioning data provides valuable information on market sentiment. Get your free guide on how to use this powerful trading indicator here.
  • Subscribe to the DailyFX Newsletter for weekly market updates and insightful analysis

---Written by Diego Colman, Contributor

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.