Chart Art: WTI Crude Oil (USOIL) Head and Shoulders Breakdown

Did you miss the neckline breakdown on crude oil?

Here are some retracement levels you can watch for if you are still bearish on the commodity.

West Texas Intermediate (USOIL) Chart by TradingView

Easing geopolitical conflict in the Middle East and a surprise increase in EIA crude oil inventories sent the energy commodity falling below $80 per barrel last week.

This was also enough to make it below the neckline of the head and shoulders reversal pattern, indicating that a downtrend of the same height as the formation is underway.

Is there still a chance to catch the decline at better levels?

Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven't done your financial homework on crude oil yet, it's time to check the economic calendar and stay up to date with daily fundamental news!

Applying the Fibonacci retracement tool to the last slide shows that the levels extend into an area of ​​interest near the broken support and the top of the short-term channel.

In particular, the 61.8% Fibonacci level is located near R1 ($81.89 per barrel) and channel resistance while the 38.2% level is located closer to the area of ​​interest at $80.40 per barrel.

The 100 SMA has just completed a bearish crossover from the 200 SMA to confirm that the path of least resistance is to the downside or that sell-offs are likely to gain momentum from here.

If any of the Fibonacci levels can keep gains in check, crude oil traders could set their sights on downside targets at the swing low and channel support near $78 per barrel. Sustained bearish sentiment could pull it to S1 ($75.95 per barrel) and then S2 ($73.97 per barrel), depending on how risk sentiment and geopolitical headlines evolve.

Do you think crude oil is ready for more losses from here?

ArtBreakdownChartCrudeOilShouldersUSOILWTI
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