WTI crude oil continues to cruise inside its channel on the short-term time frame, and it looks like another correction is in the works.
Is the trend still our friend?
Take a look at these potential inflection points on the hourly chart!
WTI Crude Oil (USOIL) Chart by TradingView
In our Global Market Weekly Recap, we noted how crude oil was dragged lower by confirmation that the OPEC+ would push through with its planned production hikes, despite tariffs-related uncertainty.
Concerns about weaker demand from China, as well as the country’s retaliatory measures on higher U.S. trade levies, also weighed on the energy commodity while propping up safe-havens like the dollar.
Can crude oil keep selling off from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on WTI crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
As you can see from the chart above, WTI crude oil has formed lower highs and lower lows inside a descending channel that’s been holding for a few weeks already. Price just bounced off support and looks ready for a pullback to the top.
The Fibonacci retracement tool shows that the channel resistance coincides with the pivot point level ($72.18 per barrel) and the 61.8% Fib, which also happens to be near the 200 SMA dynamic inflection point.
The 100 SMA is below the 200 SMA to indicate that bears have the upper hand, so if any of the Fibs are able to keep gains in check, the commodity price could fall back to the lows at $70.31 per barrel or the channel bottom just slightly above S1 ($69.23 per barrel).
On the other hand, keep an eye out for a break above the channel top, as this could mark the start of a bullish reversal to the upside targets at R1 ($73.92 per barrel) then R2 ($76.88 per barrel).
Don’t forget to keep tabs on this week’s set of top-tier news events, as well as any headlines that could impact market sentiment, when taking any trades.
