WTI crude oil is still cruising higher inside its ascending channel!
The commodity is in correction mode, though, and this might be an opportunity to catch the trend on a dip.
Check out these support levels I’m watching on the 4-hour time frame.
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
Fewer headlines on geopolitical tensions in the Middle East appear to be easing global oil supply concerns in the past few days, leading WTI crude oil to retreat from its highs at $80.85 per barrel.
At the same time, traders might also be booking profits ahead of this week’s top-tier catalysts, which include the U.S. CPI and retail sales figures. After all, major surprises would likely influence Fed policy bets, which in turn would impact overall market sentiment and commodity price action.
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 and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
On its 4-hour time frame, it can be seen that crude oil is falling below the mid-channel area of interest and may be setting its sights on a deeper correction.
The Fibonacci retracement tool shows that the 38.2% level might still hold as support around $77.25 per barrel but that the 50% level might be a stronger support zone near the channel bottom and $76 per barrel mark.
Technical indicators are hinting that the uptrend is more likely to resume than to reverse, as the 100 SMA is above the 200 SMA while Stochastic is already pulling up from the oversold region.
If any of the Fibs are able to keep losses in check, WTI crude oil could make its way back up to the swing high near $80 per barrel or the top of the channel closer to R2 ($81.75 per barrel).
On the flip side, a break below the channel support around S2 ($75.57 per barrel) could set off a reversal from the uptrend and a sustained bearish drop to S3 ($73.58 per barrel).
Which way do you think oil prices are headed from here?