Crude Oil managed to break above the 80$ resistance as the US Jobless Claims last week showed that the labour market might be in a much better state than feared. In fact, on the demand side the recent economic data has been consistently missing forecasts leading to weaker expectations for the market, but the strong data and revisions on Thursday changed the picture in the short-term. On the supply side, nothing has changed, as we still have the OPEC+ voluntary output cuts until the end of Q2 and the tensions in the Red Sea are still present.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that Crude Oil broke through the $80 level and extended the rally into the key resistance around the $83 level where we can also find the upper bound of the rising channel. This is where we can expect the sellers to step in with a defined risk above the resistance to position for a drop into the lower bound of the channel. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and increase the bullish bets into the $93 level.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better risk to reward setup around the previous resistance now turned support at the $80 level where we have also the confluence with the 38.2% Fibonacci retracement level. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into the lower bound of the channel.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the latest rally into the $83 resistance diverged with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be a signal for a pullback into the $80 support since the target is usually the base of the divergent formation. A break below the most recent swing low at $81.80 should confirm the bigger correction into the $80 level and see the sellers increasing the bearish bets into the lows.
Upcoming Events
Today we have the FOMC rate decision where the Fed is expected to keep rates unchanged. Tomorrow, we conclude with the latest US PMIs and Jobless Claims figures. Weak data is likely to weigh on Crude Oil, while strong figures should give it a boost.
