Market update: crude oil prices turn lower, Bearish Engulfing Candlestick pattern in focus

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Crude oil prices turned lower over the past 24 hours with a Bearish Engulfing candlestick pattern now in focus; watch rising trendline, RSI divergence on four-hour.

 

Source: Bloomberg

 

Price of oil Shares Commodities Market sentiment Petroleum Candlestick

Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Wednesday 20 September 2023 05:18

US crude sentiment outlook: bearish

WTI crude oil prices might be showing early signs of topping that might be worth paying attention to from a technical standpoint. On the daily chart, a Bearish Engulfing has emerged. Downside confirmation is lacking at this stage, however, and further downside from here could underscore the candlestick pattern.

This is as prices trade just beneath the 92.43 – 93.72 resistance zone, which is made up of highs from November. In the event of a turn lower, keep a close eye on the 61.8% Fibonacci extension level at 88.75 before the 20-day moving mverage kicks in. Otherwise, clearing resistance exposes the 100% level at 95.63.

IG Client Sentiment chart

 

Source: DailyFX

US crude technical analysis

Zooming in on the four-hour setting may offer better insight into what key levels to watch in the event of extended losses. For starters, on this timeframe, WTI is sitting around the near-term rising trendline from the end of August. A confirmatory downside breakout would underscore an increasingly near-term bearish technical bias.

Meanwhile, negative RSI divergence shows that upside momentum is fading. That can at times precede a turn lower. Such a case would expose the 23.6% and 38.2% Fibonacci retracement levels at 89.07 and 86.87, respectively. The latter is also closely aligned with the 100-day moving average, which may reinstate the broader upside bias.

US crude daily chart

 

Source: TradingView

 

 

 

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