Downward Trendline Pushing Crude Oil Lower – Ready to Sell?

On Tuesday, WTI crude oil prices traded bullishly edging up from 54.50 to 56.30 over easing in the US-China trade war tensions. Moreover, sentiments that the major economies will take stimulus measures to ward off a potential economic slowdown that could hit oil demand weigh on oil markets.

Lately, the United States announced it would continue a reprieve that allows China’s Huawei Technologies to buy components from US companies, signaling a slight softening of the trade conflict between the world’s two largest economies.

Moreover, China’s announcement of key interest rate changes during the weekend has prompted expectations of an imminent decline in corporate borrowing costs. With this, investors are expecting growth in China and thus increased demand for crude oil from the world’s biggest oil consumer.

WTI Crude Oil – Technical Outlook

On the 4-hour timeframe, crude oil is testing bearish trendline around 56.20, which is pushing it lower. The resistance level is becoming stronger especially due to the closing of Doji candle right below 56.20 resistance level.

The RSI and Stochastics are in the overbought zone, which is signaling chances of bearish reversal or at least correction in crude oil. On the lower side, crude oil may find support around 55.50 and 54.70. Whereas, the resistance is likely to be around 56.30. The bullish breakout can lead to oil prices towards 57.10.

WTI Crude Oil – Technical Levels

Support Resistance

54.2 55.6

53.51 56.32

52.11 57.72

Key Trading Level: 54.91

WTI Crude Oil – Trade Idea

We are opening a sell position below 56.20 with a stop loss of around 56.40 and take profit at 55.80.

Good luck!

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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