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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Crude Oil Price Outlook: Turning Back Towards Support

Crude Oil Price Outlook: Turning Back Towards Support

Paul Robinson, Strategist

Crude Oil Technical Highlights:

  • Broke upward channel structure, heading lower
  • Support dating to 2011 could soon come into play

To start the month WTI crude oil snapped the upward channel dating to the August low, and then tested the underside parallel of the pattern to start the week. The failure to recapture the channel and new highs has oil falling back lower. Snapping channel structures doesn’t in of itself mean a trend change, but can signify that a corrective period is underway.

Earlier in the week I touched on oil in a macro tech video and said we should continue to respect the upward trend. This still holds true on an intermediate-term scale, but the risk of a seeing a decline to lower levels is quickly rising with momentum fierce off the weekly high.

Watch for signs that the monthly low at 78.25 wants to hold, it could put in a floor for an extended period of range activity that builds a base for a rally later on. It would be a healthy development in the bull market.

If the monthly low breaks there is strong support not far below that threshold to watch for signs of stabilization. Going back as far as 2011 the area right around 77 has been an important one as both support and resistance. The most recent test as resistance was in July before oil underwent an extended correction.

A test and reversal off this macro level could offer up would-be longs an opportunity to join the trend higher, that also provides a backstop for stop placement. A slice through the level would warrant caution from the long side and indicate that oil is undergoing another extended correction.

Crude Oil (CL1!) Daily Chart

crude oil futures

WTI Crude Oil Chart by TradingView

Resources for Forex Traders

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.

DISCLOSURES