WTI Crude Oil Technical Analysis – This resistance is key

Crude Oil has been rallying
strongly in the past month as the prospects of more economic stimulus from
China, the resilience of other advanced economies and the production cuts gave
the black gold a tailwind to reach the $83 level. In fact, recently we got a
promise from Chinese authorities that they will step policy support
for the economy and last week Saudi Arabia announced that they will extend
their voluntary production cut through September which can be extended further
or even deepened. The price now stands at a key resistance level and the
technicals may help to catch the next major move.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that after breaking
the trendline, Crude
Oil rallied all the way up to the key $83 resistance. This is
where we should expect the sellers to step in with a defined risk above the
level to target the lows. The buyers, on the other hand, will want to see the
price breaking higher to pile in and start targeting the next resistance at

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a
strong trendline that acted as support for the buyers in many occasions. In
fact, just yesterday after the selloff following the bleak Chinese imports
data, Crude Oil rebounded strongly right from the trendline back to the resistance.
This may even turn into an ascending triangle pattern
and a breakout generally leads to big moves.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that this
is now a waiting game until we get a breakout. The buyers will want to see a
break to the upside, although there’s also the risk of a fakeout on the first
try. The sellers, on the other hand, will want to see a break below the
trendline to pile in and target the lows.

Upcoming Events

This week the
main events will be the US CPI and Jobless Claims reports tomorrow. For the US
CPI, the market is likely to focus more on the Core readings as this is what
the Fed is more interested in. Higher than expected data may lead to a risk off
sentiment as the market should start to price in a more hawkish Fed and it
might weigh on Crude Oil as well. On the other hand, lower than expected
readings may lead to a risk on sentiment due to the soft-landing narrative and
no more rate hikes. At the same time of the US CPI data, we will also see the
latest US Jobless Claims report, which might have an even bigger effect if the
data shows a big surprise. In fact, a miss may cause recessionary fears and
lead to a selloff in Crude Oil, while a beat may be taken as good news in the
short term as the resilience in the labour market can sustain overall demand.

See also the video below:

This article was written by FL Contributors at www.forexlive.com. Source