WTI Crude Oil Technical Analysis – Time for a correction?

<p>Crude Oil surged to new
highs as the supply side got squeezed even more by resilient demand and more
production cuts. In fact, the OPEC continues to forecast robust growth for oil
demand in 2023 and 2024 while keeping supplies tight as Saudi Arabia and Russia
extended their voluntary production cuts. Moreover, we got some extra supply
side shocks from Libya and Kazakhstan recently. As long as the economies remain
resilient, we might continue to see high oil prices, but this will eventually
weigh on demand which is much more precarious at the moment.</p><p>WTI Crude Oil Technical
Analysis – Daily Timeframe</p><p>On the daily chart, we can see that after the
breakout of the key $83 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a>, Crude
Oil just kept on rallying with almost no pullbacks into the $93 resistance. The
price is now finally pulling back with the upward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> being
the natural target for a meaningful correction. That’s where we can expect the
buyers to pile in again with a defined risk below the trendline to target a
break above the $93 resistance. </p><p>WTI Crude Oil Technical
Analysis – 4 hour Timeframe</p><p>On the 4 hour chart, we can see that Crude Oil has
been <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> as it
was approaching the key $93 resistance. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. In this case, a break below
the black trendline should confirm a reversal and we will likely see more
sellers piling in to target the major upward trendline. </p><p>WTI Crude Oil Technical
Analysis – 1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
price is reacting to the black trendline and the previous swing low support.
This is where we can expect the buyers to step in with a defined risk below the
level to target another rally into the $93 resistance where the sellers will step
in again to target new lower lows. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> has a few important economic releases that can
have an impact on Crude Oil. Today, the Fed is expected to keep rates unchanged
with the market focusing more on the Dot Plot and Powell’s press conference,
where he’s likely to reaffirm their data dependency. Tomorrow, we will get the
latest US Jobless Claims report and much worse than expected data should weigh
on Crude Oil while better than expected figures are likely to keep it
supported. Finally on Friday we conclude the week with the PMIs data for many major
economies like the US, Eurozone and the UK. Again, weak data is likely to send
the markets into risk off and lead to weakness in Crude Oil as well, while
strong data should provide some relief. </p><p>See also the video below</p>

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