WTI crude oil has been cruising lower inside a short-term channel, and it looks like the energy commodity could be aiming much lower from here.
Or can it still pull off a longer-term reversal?
Check out these major inflection points!
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
The energy commodity has been in selloff mode for roughly four months already, forming lower highs connected by a descending trend line visible on the 4-hour time frame.
Price is still hovering close to this resistance zone, but a short-term falling channel has also been keeping gains in check.
Can price break through the channel support and sustain its longer-term slide?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on WTI crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Rumors of the OPEC+ pushing through with output increases has been weighing on crude oil prices over the past few weeks, especially since demand conditions remain feeble.
In addition, the prospect of peace between Ukraine and Russia, bolstered by reports of the U.S. drafting a new proposal to end the war, has eased global oil supply worries.
Look out for a possible break below the short-term channel bottom near S1 ($58.28) that could drag the commodity price further south to S2 ($56.62) or to the yearly lows closer to the $56 per barrel mark.
On the other hand, a surge in crude oil prices could still take price back up to the channel top and descending trend line, with a potential break of the long-term area of interest at R1 ($61.44) suggesting that a reversal may be in the works.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
