Crude Oil Price Technical Outlook: WTI Rally Stalls- Pullback Levels
Crude Oil Technical Forecast: WTI Near-term Trade Levels
- Crude Oil updated technical trade levels – Daily & Intraday Charts
- WTI price breakout stalls ahead of 2022 high-close - risk for pullback within uptrend
- New to Oil Trading? Get started with this Free How to Trade Oil-Beginners Guide
Crude oil prices surged more than 33% off the April lows with WTI now within striking distance of the yearly highs. While the broader outlook remains constructive, the immediate advance may be vulnerable here near-term and we’re looking for a breakout of the weekly opening-range for guidance. These are the updated targets and invalidation levels that matter on the oil price weekly technical 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 Daily
Technical Outlook: Crude oil prices are trading within the confines of a ascending channel formation with price turning from the upper parallel this week. The focus remains constructive while above confluent support at 114.80-115.47- a region defined by the 2011 high, the objective June open and the 61.8% Fibonacci retracement of the March decline. A topside breach / close above the yearly high-day close at 124.76 would be needed to mark resumption of the broader uptrend towards 2008 high-week close / March high at 129.29/41. Subsequent topside objectives eyed at the upper parallel (currently near ~132) and the 2008 high day close at 138.74.
Crude Oil Price Chart - WTI 240min
Notes: A closer look at oil price action shows WTI consolidating within a rising wedge formation with the weekly opening-range taking shape just below the 124.76 resistance zone. A break below the weekly range-lows would look to challenge key support at 114.80-115.47- look for a larger reaction there IF reached with a close below needed to suggest a larger pullback may be underway towards the June lows at 111.21 and the lower parallels. Broader bullish invalidation now raised to the 61.8% retracement at 104.66.
Bottom line: The crude oil price breakout is stalling just ahead of the March high-close and while the broader outlook remains constructive, the risk rises here for a pullback within the uptrend while below 124.76. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 114.80 IF price is indeed heading higher on this stretch. Ultimately, a larger pullback may offer more favorable opportunities closer to trend support with a close above the monthly range highs needed to mark resumption. Review my latest Crude Oil Weekly Price Forecast for a closer look at the long-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
- A summary of IG Client Sentiment shows traders are net-short crude oil - the ratio stands at -2.47 (28.82% of traders are long) – typically bullishreading
- Long positions are16.51% lower than yesterday and 12.48% lower from last week
- Short positions are1.20% lower than yesterday and 21.12% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil - US Crude prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Oil - US Crude-bullish contrarian trading bias from a sentiment standpoint.
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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.