WTI Crude Technicals – 103.0 Under Threat Again

Crude Oil experienced resounding support along 103.0, pushing higher during European hours despite risk sentiment being mostly bearish during that time with Euro stock indexes trading mostly lower. On the other hand, risk sentiment during US session was broadly more positive but WTI prices actually fell, almost hitting 103.0 during the final few hours of the US trade.This apparently counter-sentiment movement can only be explained by ways of Technical influences. This assertion is affirmed by the manner which price rebounded from the 103.0 support, reaching close to the soft resistance of 103.85 once again.

Hourly Chart

Given this context, the likelihood of price hitting 103.0 increases. Stochastic agrees, with readings pushing steadily towards to Oversold region. However, whether price will be able to break 103.0 remains a huge doubt. Even if risk sentiment during US session today is bearish, 103.0 may still hold as it should be noted that technical influence has proven to be stronger than mere risk trends on 2 occasions yesterday. Furthermore, as today is the end of the week, trading activities are expected to decrease, hence strong directional movements will be less likely.

Weekly Chart

Nonetheless, if price does manage to push below 103.0 and close under the key support, we could be seeing further bearish acceleration come Monday as the 3 Black Crow pattern will be completed. Stochastic readings agree as well, with a fresh bearish cycle signal shown. The breach will also expose the 80.0 long term consolidation support as a long-term bearish target. It is likely that  98.0 will provide some support in the interim as well. However, before we get ahead of ourselves, it is necessary to affirm that the rest of the market is also looking to sell Oil. Hence if everything is setup nicely but Monday turned out to be bullish, we must be prepared to accept that the break of 103.0 could simply be a “fakeout” due to volatility play instead of one that is directional.

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