Crude Oil continues to maintain a bearish bias for now amid weaker US data and the failed breakout above the $80 level. On the supply side, nothing has changed as the tensions in the Red Sea are still present and the OPEC+ extension of the voluntary output cuts into Q2 didn’t spark a rally in prices.
On the demand side, the recent economic data has been consistently missing forecasts leading to weaker expectations for the market. As long as the current trend remains intact, we can expect lower price ahead and a bigger correction to the downside.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that Crude Oil failed to break out of the key $80 resistance zone following the miss in the US ISM Manufacturing PMI and fell to new lows. The target on the downside should be the upward trendline around the $76 level. That’s where we can expect the buyers to step in with a defined risk below the trendline to position for a rally into the $80 resistance with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the $64 support.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently broke below the upward trendline invalidating the bullish setup and turning the trend around. The sellers piled in around the downward trendline where they had the confluence with the red 21 moving average and the Fibonacci retracement levels. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a break above the $80 resistance.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the consolidation around the $78 level. A break below the counter-trendline should point to lower prices and see the sellers increasing the bearish bets into the $76 level. The buyers, on the other hand, might lean on the counter-trendline to position for a break above the downward trendline with a better risk to reward setup.
Upcoming Events
Tomorrow we get the US PPI, the US Retail Sales and the US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment survey. Strong data is likely to support Crude Oil in the short-term, while weak figures should send the prices lower.
