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WTI crude oil is testing a previous resistance area after making new 2024 highs!
In case you missed it, crude oil prices took hits after global demand concerns and higher-than-expected U.S. inventories weighed on the commodity.
It also didn’t help that the U.S. printed weak economic data and announcements from China have so far been underwhelming for the markets.
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
Luckily for USOIL bulls, OPEC and its friends have also decided to extend their voluntary output cuts. Optimism for more stimulus in China is also keeping demand afloat for the oil benchmark.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on crude oil, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
WTI crude oil prices, which found resistance at the $80.50 area, have fallen to the $78.00 psychological handle. That’s around the resistance zone from late January and early February!
Are we looking at a pullback from a bigger trend? Or a downswing that will start a longer-term reversal?
Let’s see how USOIL reacts to the $78.00 support. As you can see, the asset is also trading near the 4-hour chart’s 100 SMA while Stochastic is hanging out near the oversold zone.
A few bullish candlesticks above the $78.00 handle could attract enough bulls to extend USOIL’s uptrend. The $80.50 previous high would be a good target but the asset can also make new 2024 highs if the upswing is supported by a fundamental catalyst.
Let’s not discount another downswing though! If USOIL breaks below the 100 SMA or consistently trades below the mid-channel area on the chart, then the oil benchmark may get enough bearish pressure to test lower inflection points.
The $75.50 or $74.00 previous areas of interest may serve as potential targets if USOIL sees bearish momentum in the next couple of days.
Good luck and good trading this one!
