WTI Crude Oil Price Forecast: $58 Rebound Tests Channel After $54 Low
WTI crude oil (USOil) is struggling to stabilise around $58.15 after a late-month wobble down to $54.99, a level that briefly...
Quick overview
- WTI crude oil is currently stabilizing around $58.15 after a recent drop to $54.99, indicating cautious trader sentiment.
- The price recovery is modest, supported by key levels at $57.70 and $55.70, while the technical structure remains intact within a rising channel.
- Momentum indicators suggest stabilization, with the RSI recovering from oversold levels, but further confirmation is needed for a sustained upward move.
- Traders are advised to buy dips near $57.70, targeting $59.60, with a stop loss set below $56.60.
WTI crude oil (USOil) is struggling to stabilise around $58.15 after a late-month wobble down to $54.99, a level that briefly shook trader confidence. The bounce is a welcome respite from the sharp sell-off in December, which saw crude prices plummet through a series of support zones before buyers stepped in at the lower boundary of a rising channel on the 2-hour chart.
The recovery has been fairly modest, reflecting traders’ cautious approach as year-end liquidity thins. But the fact that crude has managed to claw back the $57.70-$58.00 area suggests that dip-buyers are still active, particularly after last week’s failed rejection at $59.60 failed to prompt more significant selling.
Technical Structure Remains Constructively Underpinned
From a technical standpoint, USOil is still trading within a rising price channel and, despite the recent volatility, the bigger picture remains intact. The rebound came from the lower channel boundary, bolstered by horizontal support at $55.70 – a level that has now held its ground twice this month.
Price has now pushed back above the 50-day EMA at $57.70, which may signal that downside pressure is beginning to ease. However, the 100-day EMA around $57.60 remains close by, so bulls still need a bit more confirmation through sustained closes above this zone.
Some key technical levels to keep an eye on are:
- Immediate resistance: $58.75, with $59.66 following not far behind.
- Channel resistance: lurking around $60.50
- Immediate support: $57.70
- Deeper support: $55.70 and $54.99
A look at the Fibonacci retracement of the recent $60.50 to $54.99 drop shows that price is hovering near the middle, reinforcing the idea that this is more about consolidation than a clean trend reversal.
Momentum Indicators Aren’t Quite Overheating – Yet
Momentum indicators are generally pointing towards a stabilization narrative. The RSI has rebounded to 58, recovering from oversold territory earlier in the week, suggesting that momentum is slowly improving but not quite getting out of control, leaving room for further upside if buyers step in near support.
Looking at candlestick patterns too, they suggest reduced selling pressure. Recently, we’ve seen smaller candles and longer lower wicks near support, which is a sign that sellers are starting to lose their grip rather than pushing aggressively lower.
That said, failure to hold above $57.70 would immediately refocus attention back on $55.70 and leave short-term risks very much two-sided.
WTI crude oil Short-Term Outlook
WTI crude oil is in recovery mode, but we need confirmation before getting too excited. A sustained move above $58.75 would open the door towards $59.66 and potentially all the way up to the upper channel near $60.50. But below $57.70, the rebound risks fizzling out and we’re back into another range bound phase.
Trade idea: Buy dips near $57.70, targeting $59.60, stop loss below $56.60.
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