Chart of the Week: WTI on the verge of significant decline?
- WTI bears are stepping in at monthly resistance, and a downtrend is expected.
- A retest of daily resistance could be on the cards first.
The price of oil is retreating from cycle highs with a number of bearish fundamentals in play.
From a technical perspective, the price is stacking up to be considerably bearish as follows:
Monthly chart
The monthly chart is showing that the price has met resistance and is being rejected.
Bulls are taking profits, and this could lead to a significant sell-off to the prior resistance that meets the 50% mean reversion and the 61.8% Fibonacci levels between $67.10 and $64.80.
Weekly chart
The weekly chart shows this more clearly within the range of the mid-March weekly candle.
Daily chart
Meanwhile, from a daily perspective, the price would be expected to retest the prior lows in the $72.50s considering the M-formation:
The lows also have a confluence with the 50% mean reversion of the current bearish impulse:
This area would, therefore, be expected to act as a strong level of resistance and lead to an onward downside continuation in the coming week:
The targetted area is between the $67.50s and $65.30s.
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Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
