WTI prints fresh lows within bearish daily structure


  • WTI prices are falling to fresh lows into the closing bell.  
  • Bears are positioning for an OPEC deal and additional supply. 

Oil prices are falling on Thursday and extending Wednesday's decline on talk of an OPEC+ accord. 

At the time of writing, WTI is down by over 1.8% and by more than $1 a barrel. WTI has fallen from a high of $72.93 to a low of $71.44.

The back gold is suffering from the expectations of more crude oil coming on line hitting after a compromise deal between leading OPEC producers and a surprisingly poor weekly reading on US fuel demand.

Reuters reported on Wednesday that Saudi Arabia and the United Arab Emirates had reached an accord that should pave the way for a deal to supply more crude to a tight oil market.

A deal has yet to be solidified, Reuters reported, and the UAE energy ministry said deliberations are continuing.

Additionally, the US dollar edged higher on Thursday, recovering some of the ground lost in the prior session following Federal Reserve's chairman, Jerome Powell, told Congress that he sees no need to rush the shift towards tighter post-pandemic monetary policy.

DXY, which measures the greenback against a basket of six currencies, has climbed in recent weeks as investors got more sanguine about the outlook for the greenback.

By the close today, DXY was 0.2% higher at 92.571. The index fell as low as 92.272 earlier in the session but has printed a high of 92.694 so far. 

The highs this year have been driven by an increasingly upbeat assessment of the US economy by the Federal Reserve, which has brought forward the time frame on when it will next raise rates.

This casts a bearish fundamental backdrop to the following technicals.

WTI technical analysis

The price of WTI has formed a bearish structure on the daily chart considering the lower daily highs for this month. 

With that being said, a bullish case can also be made and the following illustrates both bias and their subsequent market structures. 

Daily chart, WTI

The above chart illustrates the lower highs, dynamic trendline resistance, immediate horizontal daily resistance and support areas. 

Bullish scenario

Given the higher resistance in the latest daily highs at 74.95 compared to the late June highs of 74.16, combined with the M-formation, there is a risk of a break of the cycle highs of 76.40.

The M-formation's neckline has a confluence with the 61.8% Fibonacci around 73.50/60, If this is broken, the bulls will be back in control. 

Bearish scenario

The bearish scenario takes into account the lower highs of late combined with the neckline and confluence of the 61.8% Fibonacci that would be expected to act as a firm resistance on a retest.

Combine that with what could be argued to be a bearish head & shoulders ...

... bears can be on the lookout for bearish structure following a restest of the M-formation resistance area between 73.20 and 74.10.  

With that being said, there is no guarantee that the neckline of the M-formation will be retested.

There are equal probabilities that the price will continue to melt deepening into the support area in the closing sessions for the week. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains below 1.1750 on dismal German IFO, risk-off mood

EUR/USD is holding steady below 1.1750 after German IFO surprised to the downside. Hawkish Fed, Evergande risks amid stimulus hopes keep investors wary. The US dollar attempts a bounce amid a cautious mood, firmer Treasury yields. Powell’s speech awaited.

EUR/USD News

GBP/USD battles 1.3700 amid risk-aversion

GBP/USD is battling 1.3700, as the US dollar holds its bonce amid worsening market mood. The pound reverses hawkish BOE-led gains, as Brexit woes and China Evergrande uncertainty weigh. Focus shifts to Powell's speech. 

GBP/USD News

XAU/USD clings to gains above $1,750, upside seems limited

Gold gained some positive traction on the last trading day of the week and recovered a part of the overnight slump to the lowest level since August 11.

Gold News

Axie Infinity nears the end of bearish outlook as AXS contemplates 25% gains

A brief technical and on-chain analysis on Axie Infinity price. Here, FXStreet's analysts evaluate how AXS behaves as it trades above key support.

Read more

German Elections Preview: Three EUR/USD scenarios for the post-Merkel dawn

Who will succeed Angela Merkel at the helm of Europe's largest economy? The long-serving beacon of stability is stepping down as Germany's Chancellor after 16 years, and her big shoes leave a hole in the old continent's leadership. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures