West Texas Intermediate (WTI) crude oil prices have broken through a key symmetrical triangle support, signaling a bearish trend that could push the commodity lower. Technical analysis suggests the downward movement could extend by the same height as the chart formation, although a retest of the former support level is still possible before additional selling pressure intensifies.
Resistance levels are evident as nearby Fibonacci retracement zones come into play. The 38.2% retracement stands at $68.32 per barrel, with the 50% retracement at $68.75 per barrel, near the recently breached support. A deeper correction could see WTI test the 61.8% Fibonacci level at $69.17 per barrel, potentially marking a pivotal point for the bearish outlook.
Technical indicators also suggest a bearish bias. The 100-day simple moving average (SMA) remains below the 200-day SMA, signaling that the path of least resistance is to the downside. However, the stochastic oscillator is entering oversold territory, indicating that selling momentum may be weakening. Should the indicator rise, it could suggest a shift in market sentiment, potentially leading to a price rebound.
Similarly, the relative strength index (RSI) is still within room to decline before reaching oversold conditions but appears to be turning higher, hinting at a potential bounce in WTI prices. If the RSI moves back into overbought territory, it may signal a brief resurgence in selling pressure.
WTI crude oil’s bearish trend is further compounded by concerns over a potential supply glut, despite OPEC+’s decision to delay its planned production increase by three months. Additionally, weaker-than-expected data from China has contributed to downward pressure, with reduced trade activity potentially dampening global energy demand.
Looking ahead, WTI prices may respond to upcoming inventory data and key economic releases, including the US Consumer Price Index (CPI). Strong data and expectations of a less dovish Federal Reserve could strengthen the US dollar and add further pressure to commodities, including crude oil.
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