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Oil Price Forecast: Crude Oil Pullback to Offer Reset- WTI Levels

Oil Price Forecast: Crude Oil Pullback to Offer Reset- WTI Levels

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Crude Oil Technical Forecast: WTI Weekly Trade Levels

  • Crude Oil updated technical trade levels – Weekly Chart
  • WTI rallies back above critical pivot zone- constructive above 65.92, key resistance 71.13
  • New to Oil Trading? Get started with this Free How to Trade Oil-Beginners Guide
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Oil prices are on the defensive into the weekly open with WTI slipping nearly 1.6% to trade at 68.20 in early US trade on Tuesday. The losses come on the heels of staggering 14.3% rally off the August lows in just two weeks – that advance is now testing multi-month downtrend resistance and the focus is on possible downside exhaustion early in the month. These are the updated targets and invalidation levels that matter on the oil price weekly chart. Review my latest Strategy Webinar for an in-depth breakdown of this crude oil price technical setup and more.

Crude Oil Price Chart – WTI Weekly

Crude Oil Price Chart - WTI Weekly - USOil Trade Outlook - CL Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; Crude Oil (WTI) on Tradingview

Notes: In last month’s Crude Oil Price Forecast we warned that WTI price testing a critical support zone at 65.92-66.57 – a region defined by the August 2018 low-week close and the 2019 swing high. We noted that, “A break below this key support zone would likely risk another bout of accelerated losses for crude with subsequent support objectives eyed at the 100% extension of the July decline at 62.32 and the 2020 high week reversal close at 59.16.” Price plummeted through this key pivot zone mid-month with the decline registering a low at 61.72 before reversing sharply higher into the close of August- was that the low?

The advance stalled into confluent trendline resistance (former uptrend channel support / operative downtrend channel resistance) near ~70.40s with a more significant level eyed just higher at the 61.8% Fibonacci retracement of the July decline at 71.13- a breach / close above this threshold would be needed to mark resumption of the broader uptrend towards critical resistance at the 2011 & 2012 lows / 100% extension at 74.94-77.37. Initial weekly support remains back at the 65.92-66.57 pivot zone- losses should be limited to this region IF price is indeed heading higher. A break below this threshold would once again threaten a run on the 2020 high-week close at 59.16.

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Bottom line: The oil price recovery is testing multi-month downtrend resistance into the September open. From a trading standpoint, the threat remains for a near-term pullback off these levels- look for downside exhaustion / a possible low ahead of 65.92 with a breach / close above 71.13 needed to suggest a more significant low was registered last month. I’ll publish an updated Crude Oil Price Outlook once we get further clarity on the near-term WTI technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Crude Oil Trader Sentiment – WTI Price Chart

Crude Oil Trader Sentiment - WTI Price Chart - USOil Retail Sentiment - USOil Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long crude oil - the ratio stands at +1.25 (55.49% of traders are long) – typically weak bearish reading
  • Long positions are 4.02% lower than yesterday and 8.00% lower from last week
  • Short positions are4.25% higher than yesterday and 0.46% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent shifts in sentiment warn that the current Oil - US Crude price trend may soon reverse higher despite the fact traders remain net-long.
Oil - US Crude Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -8% 19% 1%
Weekly -6% 20% 4%
Learn how shifts in Oil retail positioning impact trend
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Previous Weekly Technical Charts

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--- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

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

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