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Crude Oil Technical Outlook Points to Lower Prices Ahead

Crude Oil Technical Outlook Points to Lower Prices Ahead

2019-07-29 11:00:00
Paul Robinson, Currency Strategist
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Crude Oil Price Highlights:

  • WTI crude oil showing weak price action, watch December t-line
  • Brent crude similar but has t-line support keeping it afloat for now

Check out the intermediate-term fundamental and technical outlook in the Q3 Crude Oil Forecast.

WTI crude oil showing weak price action, watch December t-line

Crude oil came off a high mid-month rather aggressively, and since then it has failed to mount much of a recovery. This type of price action suggests that there could be downside follow-through in the coming sessions.

One could also look at the past month’s trading as a head-and-shoulders pattern with the right shoulder nearing completion. The hourly chart may be of some help here for would-be shorts as there is a clear short-term trend-line that is helping keep price supported. Price is also getting squeezed (triangle) within the parallels, a move of some type looks to be very near.

A break below the underside trend-line, with confirmation arriving via an hourly closing candle under 55.58 should have crude oil rolling downhill towards 54.73 and then the December trend-line. A test of the trend-line could prove important; a break will have the June low near 50 in focus, while a hold could keep oil continuing to chop around over the intermediate-term.

WTI Crude Oil Daily Chart (looking for December t-line)

Crude Oil Technical Outlook Points to Lower Prices Ahead

WTI Oil Chart by Tradingview

WTI Crude Oil Hourly Chart (watch underside t-line)

Crude Oil Technical Outlook Points to Lower Prices Ahead

WTI Oil Chart by Tradingview

Brent crude similar but has t-line support keeping it afloat for now

The Brent contract is of course acting similarly to WTI, but does have a line of support in place right now that its US counterpart doesn't. The December trend-line was met with buying recently, but the break of the June/July channel points to more follow-through from the April top.

Snapping the recent low at 61.60 will quickly have the June low at 60.28 in focus. A new intermediate-term low below that point will bring in a pair of long-term trend-lines rising up from 2016 (two starting points included). It would take some aggressive selling to get to those levels given they are in the 55/52 range, but certainly within the realm of possibility in the not-too-distant future.

Brent Crude Oil Daily Chart (t-line keeping it supported for now)

Crude Oil Technical Outlook Points to Lower Prices Ahead

Brent Crude Oil by Tradingview

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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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