WTI Short-Term Price Forecast
The near-term outlook for WTI crude oil leans bearish. Today’s initial move up stalled at the 78 percent retracement of the decline from $43.52. The subsequent move down formed another long upper shadow on the daily candlestick chart. The body of today’s candlestick is too big to be a shooting star, but the price action is still bearish. Also, WTI took out the 62 percent retracement of the rise from $41.06. These factors, weekly reversal pattern setups, recently confirmed daily bearish momentum divergences, and the wave formation down from $43.52 call for a deeper test of support.
The primary wave down from $43.52 is poised to meet its $41.42 smaller than (0.618) target. This is bearish for the near-term outlook because most waves that meet the smaller than target extend to the equal to (1.00) target, in this case, $40.5. The $40.5 level is crucial because this is the 62 percent retracement of the rise from $38.72. Settling below this will call for a move below $40.0 and the 50-day moving average to challenge $39.5 and possibly $39.0, the intermediate (1.382) and larger than (1.618) targets, respectively. The $39.0 objective is a likely stalling point because this is also the 21 percent retracement of the move up from $21.99.
Nevertheless, the 21-day moving average around $41.3 has been strong support for the past few days. Therefore, because this is near the $41.42 smaller than target of the wave down from $43.52 a test of resistance will probably take place first. Resistance at $42.5 is expected to hold and $43.4 is key. Settling above $43.4 will call for WTI to challenge $43.9. This is a highly confluent wave projection that is also in line with the 200-day moving average. Because of this, a deeper test of support is expected before overcoming $43.9.
Brent Short-Term Price Forecast
Brent crude oil stalled at $45.79 today and the subsequent move down took out the smaller than (0.618) target of the primary wave down from $46.23. Therefore, Brent is poised to reach $43.9 tomorrow. This is the equal to (1.00) target, the 50 percent retracement of the rise from $41.72, and is in line with the 21-day moving average. The $43.9 target may prove to be a stalling point, but a close below this will clear the way for $43.3 and possibly $42.7 during the next couple of days.
Odds for a test of resistance will rise once $43.9 is met. However, resistance around $45.3 is expected to hold. Overcoming $45.3 will call for a test of key resistance at $45.9. This then connects to $46.5 and $47.1.
This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial