WTI Crude Oil Technical Analysis – Another drop in sight?

<p>The summer rally in Crude
Oil seems to be coming to an end as the sentiment turns sour due to the
weakening global economy and the expectations of a big stimulus from China
waning. In fact, despite the very weak economic data and an ailing economy, the
PBoC delivered small rate cuts and even refrained to cut rates on some key
benchmarks. It’s getting more and more clear that we won’t see anything big
coming from China and the weakness in its economy is likely to spread across
the globe. </p><p>WTI Crude Oil Technical
Analysis – Daily Timeframe</p><p>On the daily chart, we can see that Crude Oil
peeked above the key $83 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> but sold
off soon after as the economic problems in China weighed on the sentiment. The <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> are now
crossed again to the downside, which is a bad omen for the buyers. We can see
that the sellers leant on the red 21 moving average as the price retested the
moving average after the breakout and we are now consolidating around the $80
level awaiting a catalyst. </p><p>WTI Crude Oil Technical
Analysis – 4 hour Timeframe</p><p>On the 4 hour chart, we can see that Crude Oil has also
breached the upward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> that was
defining the uptrend into the $83 resistance. This is another bad signal for
the buyers and an extra confirmation for the sellers that the trend might be
turning. We can see that the price has recently bounced from a previous swing
low around the $79 level, but the sellers came into the market again around the
$82 level. We have now created a small range between the $79 support and the
$82 resistance and a break on either side should lead to a more sustained move
as momentum traders are likely to pile in. </p><p>WTI Crude Oil Technical
Analysis – 1 hour Timeframe</p><p>On the 1 hour chart, we can see more
closely the range between the $79 support and the $82 resistance. The buyers
might want to lean on the support with a defined risk below the level to target
a break above the resistance. On the other hand, if the price comes back to the
resistance, the sellers are likely to pile in with a defined risk above the
level to target a break below the support. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is
pretty empty on the economic data side as we will only have the PMIs today and
the US Jobless Claims tomorrow. If the data surprises to the upside we might
see some strength in Crude Oil in the short term, but the prospects of more
rate hikes might drive it down soon after. On the other hand, weak data should
weigh on Crude Oil as global growth is already fragile with the economic
problems in China and weakness in the other major economies is not going to
help. Remember also that this is the Jackson Hole Symposium week, so we will
hear from many central bankers including Fed Chair Powell, who is set to speak
on Friday. </p><p>See also the video below:</p>

This article was written by FL Contributors at www.forexlive.com.