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Crude Oil Price Reversals Suddenly Shift Outlook Lower

Crude Oil Price Reversals Suddenly Shift Outlook Lower

2019-04-29 11:00:00
Paul Robinson, Currency Strategist
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Crude Oil Technical Highlights:

  • WTI crude oil posted weekly reversal around 2016 trend-line
  • Brent crude down-move facing channel support test already

To see what fundamental drivers are expected to drive oil through the remainder of the quarter, check out the Q2 Crude Oil Forecast.

WTI crude oil posted weekly reversal around 2016 trend-line

Last week, WTI appeared headed for more push higher into the 67s before retreating, but with Friday’s big down day a weekly reversal candle was cemented, and where it developed from was also important. In the vicinity of the past few weeks’ trading range is the trend-line, or lower parallel of a channel, off the 2016 low.

With oil becoming quite extended in recent weeks, rallying over 50% off the December low and then having such a powerful key-reversal event, the trading bias has firmly turned in favor of shorts. Looking at the daily time-frame a few angles of support are on the verge of breaking, which could soon have the 200-day and lower parallel of the channel since February in play; both in the 61/60-area.

At this time, it will require a fair amount of work to turn the picture back in favor of longs. As long as a bounce doesn’t overtake Friday’s big down day it looks as though shorts will continue to have the upper hand in the sessions ahead.

WTI Crude Oil Weekly Chart (Reversal at 2016 line)

Crude Oil Price Reversals Suddenly Shift Outlook Lower

WTI Crude Oil Daily Chart (support about to break)

Crude Oil Price Reversals Suddenly Shift Outlook Lower

Brent crude down-move facing channel support test already

Brent has been lagging behind WTI a bit lately, and with that the bottom of the comparable channel since February is already coming under fire. If a bounce develops off the lower parallel, then the low of the bounce will be used on any weakness that follows as a cue to look for downside momentum to pick up again. A break, whether from right here or after a bounce, will have the 200-day in focus, followed by the 2016 slope down near 67.

Brent Crude Oil Weekly Chart (bearish reversal)

Crude Oil Price Reversals Suddenly Shift Outlook Lower

Brent Crude Oil Daily Chart (break of channel to lead to lower prices)

Crude Oil Price Reversals Suddenly Shift Outlook Lower

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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

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