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Oil Price Outlook: Crude Weekly Reversal Snaps Six-Week Rally in WTI

Crude Oil Technical Price Outlook: WTI Weekly Trade Levels

Oil prices are poised to snap a six-week winning streak after responding to confluence resistance with WTI down more than 8% this week to trade 35.80 in early New York trade on Friday. The post-crash rally may be vulnerable while below these highs near-term and the threat remains for a deeper pullback in the days ahead. These are the updated targets and invalidation levels that matter on the oil price weekly chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this crude oil price setup and more.

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Crude Oil Price Chart – WTI Weekly

Crude Oil price chart

Chart Prepared by Michael Boutros, Technical Strategist; Crude Oil (WTI) on Tradingview

Notes:Crude oil prices are trading within the confines of a descending pitchfork formation extending off the 2018 / 2020 highs with the breach above the median-line in May now testing the 75% parallel – lateral resistance stands at the 61.8% retracement of the yearly range (to zero) and the 2017 swing low at 40.55-42.03. WTI is poised to mark a weekly reversal off this threshold this week and highlights the threat of a larger correction while below this mark.

Initial support rests at the 2016 low-week close at 29.08 backed by the median-line, currently ~23 – look for downside exhaustion ahead of this trendline IF price is heading higher. A topside breach / close above 42 exposes subsequent resistance objectives at 45.23 and the June 2019 lows at 50.59.

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Oil Forecast

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Bottom line:Oil prices have had a phenomenal recovery off the crash-lows with price now attempting to close a weekly reversal off down-slope resistance. While the broader recovery remains in focus, the advance may be vulnerable here near-term. From a trading standpoint look to reduce long-exposure / raise protective stops – be on the lookout for downside-exhaustion into the median-line IF price is indeed heading higher. I’ll publish an updated Oil Price Outlook once we get further clarity on the near-term technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Crude Oil Trader Sentiment – WTI Price Chart

Crude oil sentiment WTI

  • A summary of IG Client Sentiment shows traders are net-long crude oil – the ratio stands at +2.25 (69.27% of traders are long) – bearish reading
  • Long positions are 6.35% lower than yesterday and 6.95% lower from last week
  • Short positions are10.70% lower than yesterday and 10.63% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Oil – US Crude-bearish contrarian trading bias from a sentiment standpoint.
Oil – US Crude BULLISH

Data provided by

of clients are net long. of clients are net short.

Change inLongsShortsOI
Daily-6%-5%-6%
Weekly-10%4%-6%

Previous Weekly Technical Charts

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— Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex