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WTI Crude Oil Forecast and Technical Analysis: Head and Shoulders

WTI Crude Oil Forecast and Technical Analysis: Head and Shoulders Pattern

Crude Oil prices continue to climb higher. Prices ended higher Friday, feeding again for the week as U.S. sanctions on Venezuela’s state-owned oil firm raised the risk of tighter crude supplies and a recent survey showed a considerable monthly decline in OPEC production.

WTI Crude Oil May contracts ended the week at 55.29 after testing our target at 55.47.

Fresh comments from Saudi Arabia Energy Minister Khalid Al-Falih suggest OPEC+  will continue to curb production even as the U.S. imposes sanctions against Petróleos de Venezuela, S.A. (PDV S.A.) as the region pledges to reduce output ‘well below the voluntary cap’ during the proposed six-month period.

Prices found added support after Baker Hughes BHGE, +4.10% on Friday reported that the number of active U.S. rigs drilling for oil fell by 15 to 847 this week. That more than offset the increase of 10 in the oil-rig count from a week earlier.

Venezuela, however, remains as a key factor for oil traders. Traders believe that is one of the factors which is supporting the price and I do not think that the situation is going to be resolved anytime soon because the country is looking to sell some of its gold to buy some breathing room.

On the other hand, the Fed’s rate increase pause announced earlier this week has added to growing perceptions about shaky economic growth in the U.S. in the months to come. Global growth concerns may limit the Crude Oil rally as well.

I expect the oil price to continue to move higher but do not expect any massive rally. 56.25 remains as the key level. Prices must break above 56.25 to continue bullish move.

Technically:

On the bigger picture, as seen on the chart, WTI Crude Oil completed an Inverse Head & Shoulders pattern.

If we see daily closings above 56.25, we can talk about another bullish run towards 58.50 and 59.30.

Technical indicators readings on H4 chart and Daily Chart show that there is still room upside.

Above the current level, 56.25 remains as a strong intraday resistance. Breakout of 56.25 will send the prices 57.02 and 57.79.

A technical correction may occur between 57.00 – 57.79.

Any additional intraday opportunities will be published for the members.

We keep our long positions targeting 56.25, 57.00 and 57.79.

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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

WTI Crude Oil: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

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