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Crude Oil Price Outlook: Sellers React at Confluent Resistance

Crude Oil Price Outlook Talking Points:

  • Crude oil prices have been relatively quiet so far in Q3, and this follows a rush of volatility that showed in the second-half of Q2.
  • Crude oil prices are currently seeing resistance at a confluent zone on the chart while remaining below an aggressively-sloped bearish trendline.
  • DailyFX Forecasts are published on a variety of markets such as Gold, the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Crude Oil Prices Sticking to Resistance as Q3 Starts with Stability

Crude Oil prices continue to exhibit a tone of stability following a rush of volatility that showed in the second-half of Q2. After a strong sell-off spanned from late-April into early-June, a bullish ramp developed a few weeks ago that propelled prices into a confluent zone of resistance. This came-in around the 60-handle on WTI crude oil, with an assist from a bearish trendline taken from the April and May swing highs. Bulls did not give up easily there, as a week of struggle was accented by a flare in geopolitical tensions; but this was eventually won-out by bears posing a bearish shift last week, keeping oil bulls on the back foot as the potential for a larger breakdown remains.

WTI Crude Oil Daily Price Chart

wti crude oil price chart

Chart prepared by James Stanley

In last week’s technical piece on crude oil, a deeper zone of potential support/resistance was looked at that spanned from 57.26-57.85, with the latter of those prices functioning as the February swing-high along with both 57.25 and 57.47 as confluent Fibonacci levels. Price action posed an initial break below this zone after last week’s bearish push, but prices have since retraced back into this zone with sellers showing a response as indicated by the upper wicks on the four-hour chart from the past few trading days. This can keep the door open for short-side swing approaches, targeting a re-test of the 55-area on the chart.

WTI Crude Oil Four-Hour Price Chart

wti crude oil price chart

Chart prepared by James Stanley

WTI Crude Oil Longer-Term

Should that area around the price of 55 soon give way, there’s an additional area of support below that could remain of interest, and this takes place from 50.54-51.59. This was looked at coming into June and this is the area that bulls re-grabbed control of crude oil price action last month. This could remain as a secondary area of support potential should the decline continue, after which the psychological level of 50 comes into play.

On the bullish side of oil prices, given the amount of resistance that showed around the 60-handle, traders would likely want to wait for a confirmed break of that zone before looking to re-institute bullish strategies on WTI crude oil.

WTI Crude Oil Weekly Price Chart

wti crude oil price chart weekly

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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