Chart Art: WTI Crude Oil (USOIL) Hanging Out at Area of Interest

June 11, 2024 6:53 am

WTI crude oil is in correction mode as it tests the confluence of resistance levels on the 4-hour chart.

Is the trend still our friend on this one?

Check out these inflection points I’m watching:

WTI Crude Oil (USOIL) 4-hour Chart by TradingView

WTI Crude Oil (USOIL) 4-hour Chart by TradingView

Expectations of stronger summer demand for crude oil are lifting the commodity price higher lately.

But can it sustain its climb?

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 the U.S. dollar and crude oil, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

WTI crude oil is currently testing a former support zone around the $78 per barrel mark, which happens to coincide with a falling trend line that’s been holding since April.

To top it off, this lines up with the 61.8% Fibonacci retracement level and R1 ($77.65 per barrel), too!

Moving averages are suggesting that the selloff is more likely to resume than to reverse, as the 100 SMA is below the 200 SMA. In addition, the 200 SMA dynamic resistance lines up with the trend line to add to its strength as a ceiling.

If so, crude oil could set its sights back on the swing low at $72.28 per barrel near S1 ($72.74 per barrel).

A break above the strong resistance zone, on the other hand, could mark the start of a reversal from the long-term downtrend.

Geopolitical headlines had been driving crude oil direction earlier in the year, but it seems that the impact of escalating tensions on global supply concerns is starting to fade.

Don’t forget that the OPEC+ already agreed to extend its production cuts into 2025 but that the commodity appeared to shrug off the decision when it carried on with its slide.

Still, the upcoming U.S. catalysts might have a say on crude oil price action and overall market sentiment. After all, adjusting the timeline of interest rate changes could have strong implications for global growth and commodity demand.

Do you think the U.S. CPI release and FOMC statement would make or break crude oil’s trend?

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