On the daily chart below, we can see that crude oil has recovered a lot since the flash crash into the $64 support. The black gold has been trying to break above the key resistance zone at the $73 level for several times, but it just keeps failing. There are strong sellers there as they may be seeing future demand dropping more than expected due to a possible global recession.
In fact, we have been seeing manufacturing PMIs collapsing across the globe, with the China Manufacturing PMI released today coming in much lower than expected and in contractionary territory. It’s worth remembering that China is the world’s biggest oil importer, so this data may weigh on oil prices.
WTI Crude Oil Technical Analysis
On the 4 hour chart below, we can see that yesterday crude oil sold off pretty heavily into the $69.40 level and seems stabilising there. For the buyers this seems like the last line of defence as the next support comes only at the $64 level.
We might even create a range here between the $69.40 support and $73 resistance. In case we see the crude oil dropping more though, the sellers will get even more conviction for a fall into the $64 area and the buyers are likely to fold increasing the downside momentum.
On the 1 hour chart below, we can see that this $69.40 level is a “make it or break it” moment for the buyers. If they pile in here, they will have a defined risk below the recent low and the first target would be the $71 level with the resistance at $73 next.
The sellers, on the other hand, will want to see the recent low to be taken out to increase the selling pressure and take the crude oil back to the $64 support, aiming for a major breakout and new lower lows probably into the $57 level next.
