WTI Crude Oil Technical Analysis and Short-Term Forecast
WTI crude oil settled below $64.2 and confirmed Monday’s bearish dark cloud cover pattern. Furthermore, the primary wave down from $67.98 and subwave down from $65.98 have taken out their smaller than (0.618) targets around $63.8. Therefore, the pullback from $67.98 is poised to reach at least $63.1 and likely $62.5 tomorrow. The $62.5 target is most confluent and is in line with the 62 percent retracement of the rise from $59.24. This could prove to be a stalling point. However, a close below $62.5 will call for a test key support at $61.4.
The $61.4 target is currently most important because it is in line with the 20-day moving average. Since early November, the 20-day moving average has been tested and held on a closing basis each time WTI was poised for a bearish reversal. Therefore, closing below $61.4 will signal that a much more significant test of support is finally underway.
With that said, during the past several weeks, tests of support such as the one currently underway have failed. Therefore, it will not be surprising to see the move down stall again and rally during the latter half of the week. There is not much that calls for this before reaching $62.5, but caution is warranted. For now, though, resistance at $65.4 is expected to hold and $66.4 is key. Settling above $66.4 would imply that the move down has failed again and clear the way for $67.5 and then a push toward $69.2.
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.