Jump to content

Market update: WTI oil faces potential decline

Recommended Posts

Crude oil prices may be readying to extend lower; daily chart is maintaining a broader bullish bias but, bearish Head & Shoulders in focus on four-hour chart.


original-size.webpSource: Bloomberg

Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Wednesday 23 August 2023 

WTI crude drops lower

WTI crude oil prices may be reading to extend lower following recent technical developments, especially on the four-hour chart. For now, let us focus on the daily setting. Oil is currently on course for a second consecutive weekly loss, which has been fairly unusual for WTI given price action since May.

Is this a sign of technical exhaustion?

In recent days, WTI left behind new support around $78.99 after confirming a breakout under the rising trendline from June. This also followed the emergence of a Bearish Engulfing candlestick pattern. Meanwhile, resistance was established around $81.56. Below current price action, a bullish Golden Cross emerged between the 50- and 100-day moving averages (MAs).

So, while the near-term technical landscape is appearing bearish, the broader upside bias remains focused higher. But, there are brewing signs of potentially more bearish price action to come.

WTI crude daily chart


1-crude-oil-prices-ready-to-extend-lowerSource: TradingView

Prices sitting above bearish chart

Using the four-hour setting below, we can see the outlines of a Bearish Head & Shoulders chart formation taking shape. Recently, the peak of the right shoulder was established around $81.69. The neckline seems to be around $79.02.

Now, prices are sitting just above the bearish chart formation. Confirming a breakout lower could open the door to extending lower. That would place the focus on the $77.30 inflection point before the 17 July 2023 low of $73.81 comes into focus.

Otherwise, pushing back above the right shoulder may open the door to revisiting the 10 August 2023 high of $84.85.

WTI crude four-hour chart


2-crude-oil-prices-ready-to-extend-lowerSource: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 29/09/23 19:22
  • Posts

    • The crypto market appears to be showing signs of recovery, with significant improvements in the Sharpe Ratios of Bitcoin, BGB, and Ethereum, according to an article published on Friday.  The Sharpe Ratio, a measure used to understand the return of an investment compared to its risk, has seen a notable increase for both cryptocurrencies. Bitcoin's Sharpe Ratio has risen from -2.4 to 0.68, while Ethereum and BGB have also experienced a similar uptrend. This change signifies higher returns at lower risk, which is expected to attract more investors to the crypto market. In addition to the improved Sharpe Ratios, increased network activity and trading volume as shown on CEXs like Bitget, Binance, and a few DEXs are suggesting a healthier market state. The current trading prices of Bitcoin, reflect this overall positive market sentiment. As of Friday, Bitcoin was trading at $27,069.73, BGB at $0.454 and Ethereum at $1,677.89. These developments are significant as they indicate reduced risk in the crypto market. The increase in the Sharpe Ratios for Bitcoin, BGB, and Ethereum suggests that these cryptocurrencies are becoming less risky investments, which could potentially lead to an influx of new investors into the market.  Could this rise in Sharpe Ratios coupled with increased network activity and trading volume point towards a recovering and less risky crypto market?
    • Hi, That's great, thank you very much. Very helpful! Many thanks.
    • Texas Instruments Inc., Elliott Wave Technical Analysis Texas Instruments Inc., (TXN:NASDAQ): Daily Chart, 29 September 23 TXN Stock Market Analysis: We have been moving lower as expected from the previous forecast. Looking for continuation lower as there is an incomplete bullish sequence. Looking for extension lower in wave {iii}. Downside target stands below wave (W). TXN Elliott Wave Count: Wave {iii} of C. TXN Technical Indicators: Below al averages.   TXN Trading Strategy: Looking for shorts on the way down.   TradingLounge Analyst: Alessio Barretta Source : Tradinglounge.com get trial here!       Texas Instruments Inc., TXN: 4-hour Chart, 29 September 23 Texas Instruments Inc., Elliott Wave Technical Analysis TXN Stock Market Analysis: As we are getting an overlapping structure in what could be a wave {iii} there is a high chance we will see an acceleration lower to then see a series of fours and fives.   TXN Elliott Wave count:  Wave (iii) of {iii}. TXN Technical Indicators: 20EMA as resistance. TXN Trading Strategy: Looking for shorts on the way down.
  • Create New...