The OPEC+ production cuts and the expectations of more economic stimulus in China following the dismal inflation numbers, gave Crude Oil enough strength to break above the key resistance zone around the $75 level. After a brief rally, the price stalled and reversed as the PBoC held off from delivering more rate cuts. This week we got a spike in the price as there was a report that Saudi Arabia wanted to extend the cuts until the end of the year, but the move was quickly faded as the report was eventually withdrawn.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that Crude Oil has finally managed to break above the resistance zone around the $75 level, but the rally stalled at a trendline and fell back into the resistance now turned support. The price has bounced on the support and it’s now targeting again a breakout of the trendline. If we do get a breakout, Crude Oil is likely to rally all the way up to the $83 resistance.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price bounced on a strong support zone where we had the upward trendline and the 50% Fibonacci retracement level. We should now see the price rallying into the downward trendline again and challenge a breakout.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is now contained in what could end up being a triangle pattern. The buyers will need the price to break above the downward trendline to pile in and extend the rally into the $83 resistance. The sellers, on the other hand, will want to see the price breaking below the $75 support zone to invalidate the bullish setup and take the price back into the $67 region.
Upcoming Events
The next data to watch for will be the US Jobless Claims on Thursday. The market is likely to react more to big deviations from the expected numbers. In fact, a big miss is likely to weaken Crude Oil as the fears of a recession should pressure the commodity. On the other hand, given the current soft-landing narrative, a big beat should give the Oil market a boost and lead to the break higher.
See also the video below:
