CRUDE OIL PRICE WEEKLY TECHNICAL OUTLOOK – SUMMARY POINTS
- Crude oil prices jump higher as the commodity aims to form a fresh bullish uptrend
- Further upside in crude oil prices could be limited if bulls fail to top technical resistance
- Get your Q3 Crude Oil Forecast for comprehensive technical outlook
Crude oil prices climbed roughly 4.5% over the last 5 trading days as the commodity continues to edge higher. It now appears that crude oil has smashed through bearish downtrend resistance formed by the series of lower lows since late April after this past week’s healthy advance. Bullish momentum could be at risk, however, as the recent streak of gains runs into technical resistance.
CRUDE OIL PRICE CHART: DAILY TIME FRAME (APRIL 15, 2019 TO JULY 12, 2019)
Crude oil prices currently sit slightly above $60.00 and just below technical resistance posed by the 38.2% Fibonacci retracement of the commodity’s trading range since printing its year-to-date high of $66.47 on April 23. While the short-term bullish uptrend line does look to provide a bit of buoyance to crude oil price action, this level of confluence threatens to keep further upside at bay. Yet, if crude oil bulls can top this zone, the door to $62.00 could open up quickly with prices possibly eyeing the 23.6% Fib as a next upside target.
CRUDE OIL PRICE CHART: DAILY TIME FRAME (DECEMBER 14, 2018 TO JULY 12, 2019)
This past week’s high of $60.85 will likely serve as the first objective for oil bulls to overcome in the days ahead. Although, selling pressure may increase at this technical level where prices have previously consolidated seeing that old support can serve as new resistance. The 78.6% Fibonacci retracement of crude oil’s bullish rise from December 2018 to April 2019 – roughly around the $61.25 price level – could serve as another level of technical resistance that possibly hinders upside prospects.
If crude oil does in fact turn lower after being rejected at the aforementioned levels of technical resistance, the recent breach of downtrend resistance last week could be considered a “fake-out breakout” and bullish price action may ebb. Forthcoming weakness in crude is also hinted at by the possible rebound higher in oil price volatility in light of the broad inverse relationship between crude oil and oil price volatility.
CRUDE OIL CLIENT SENTIMENT: DAILY TIME FRAME (JANUARY 14, 2019 TO JULY 12, 2019)
According to IG Client Sentiment data, 53.2% of crude oil retail traders are net-long resulting in a long-to-short ratio of 1.14. Bullish conviction is starting to wane judging by the change in trader positioning which details the number of traders net-long dropping by 12.2% and net-shorts rising by 19.6% relative to last week.
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