Crude Oil has been selling off heavily since the market shifted focus from the Hamas-Israel conflict to deteriorating economic data in major economies. The demand side is starting to look bleaker with PMIs contracting further and the US labor market showing signs of weakness.
Last week, Crude Oil started to rally as OPEC+ sources announced consideration of deepening supply cuts. This could lead to a classic “buy the rumor, sell the fact” trade with Oil prices rallying into the meeting and potentially selling off on confirmation of the cuts, unless they are very significant.
WTI Crude Oil Technical Analysis – Daily Timeframe
WTI Crude Oil Daily
On the daily chart, we can see that Crude Oil bounced around the $72.50 level and erased almost all the losses of the selloff from the $80.00 level. The bias remains bearish as the price has been printing lower lows and lower highs with the moving averages crossing to the downside. Sellers can be expected to pile in around the $80.00 level with the 38.2% Fibonacci retracement level and the red 21 moving average providing confluence.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
WTI Crude Oil 4 hour
On the 4-hour chart, the latest leg lower diverged with the MACD, potentially signaling weakening momentum followed by pullbacks or reversals. The break above the minor trendline suggests a possible reversal up to the major trendline around the $82.00 level, but buyers will need to break above the resistance around the $80.00 level first.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
WTI Crude Oil 1 hour
On the 1-hour chart, the price has been consolidating around the $77.70 level for the first part of the week. More upside into the OPEC meeting is anticipated, with a rally to the $80.00 level likely leading to a divergence with the MACD.
Upcoming Events
Today, we will get the latest US Jobless Claims report, likely the most important release of the week. Tomorrow, the US will be on holiday for Thanksgiving Day, leading to thinner market liquidity. Friday will conclude the week with the latest US PMIs. Weak US data might weigh on Crude Oil, potentially bringing recession expectations forward, while strong data could support the market in the short term.
