Crude Oil Technical Forecast: WTI Chart Shows More Losses Ahead
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Crude Oil Technical Price Forecast: Bearish
- WTI crude oil prices fell nearly 10%, bringing prices to the lowest level traded since February
- Prices breached the 200-day SMA and 90 psychological level, tiring WTI’s technical posture
- A crossover of the 50- and 100-day SMAs is on the cards, threatening sentiment further
WTI Crude Oil Technical Outlook
West Texas Intermediate (WTI) crude oil prices fell nearly 10% last week, wiping out the prior week’s gain and dropping to the lowest level traded since February. While August just started, prices are on track to record the third and largest consecutive monthly decline, assuming the prevailing bear trend holds. Despite last week’s sharp decline, WTI prices are around 17% higher on a year-to-date basis. However, if prices continue falling at last week’s pace, it would put bears within 7% of the January 2022 low.
That assumption looks increasingly likely, given several bearish chart developments. Prices pierced below the 90 psychological level before pausing at the 61.8% Fibonacci retracement level from the December 2021/March 2022 move. If prices break below the 61.8% Fib level, prices may threaten a resistance zone turned to support from October 2021 and January 2022.
Overall, prices look poised to slide further and extend the downtrend that started in June. The move below the 200-day Simple Moving Average (SMA) is likely to increase the bearish sentiment on the commodity. The 50-day SMA is tracking lower, and a cross below the 100-day SMA looks imminent. That would generate a negative signal that could put more pressure on prices. That said, oil’s path of least resistance is to the downside.
WTI Crude Oil Daily Chart
Chart created with TradingView
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--- Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwater on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.