WTI Crude Oil Testing Major Resistance; Whipsaw Eyed
Since March of 2022, the price of WTI crude oil has been steadily declining. Whilst not exhibiting a dominant downtrend, there is a discernible downward bias, particularly when assessing the weekly timeframe. However, this week’s attention is on the daily chart, showing that price finished the week testing (marginally breaching) resistance at $82.45, a level withstanding several upside attempts since late 2022.
With the Relative Strength Index (RSI) departing overbought territory (after testing levels not seen since early 2022), this could be another time sellers step in and defend $82.45. The caveat here, however, is that circling just above the noted resistance level is a 1.618% Fibonacci projection ratio at $85.49 (an ‘alternate’ AB=CD bearish pattern) and a 38.2% Fibonacci retracement ratio at $86.56, together with horizontal resistance at $86.36. This area of technical confluence may serve as a magnet to price and flush out a large chunk of sellers at current resistance (a stop-run, if you will) with a test of the 86.40ish region this week/month to potentially propel price back under $82.45, in line with the current downtrend.
With the Relative Strength Index (RSI) departing overbought territory (after testing levels not seen since early 2022), this could be another time sellers step in and defend $82.45. The caveat here, however, is that circling just above the noted resistance level is a 1.618% Fibonacci projection ratio at $85.49 (an ‘alternate’ AB=CD bearish pattern) and a 38.2% Fibonacci retracement ratio at $86.56, together with horizontal resistance at $86.36. This area of technical confluence may serve as a magnet to price and flush out a large chunk of sellers at current resistance (a stop-run, if you will) with a test of the 86.40ish region this week/month to potentially propel price back under $82.45, in line with the current downtrend.
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