Crude Oil Weekly

Crude prices rebounded off confluence trendline support this week at the 42-handle where the median-line of a long-term pitchfork formation dating back to 2015 converges on basic channel support. A more significant region of Fibonacci support is seen lower at 40.52/84 – a region defined by the 1.618% extension and the 50% retracement of the 2016 advance. Both these levels may end up offering a more meaningful low near-term.

Crude Oil Daily

Technical Outlook: The immediate focus is on this rebound with resistance now eyed at the highlighted median-line confluence around ~45.80/83. Ultimately, the risk remains for a final dip into the structural support confluence at 40.52/84 before a more meaningful recovery.

Crude Oil 240min

Notes: A closer look at the 240min chart highlights immediate resistance at 45.19 backed by the 45.80/83 zone (near-term bearish invalidation) - both levels of interest for possible near-term exhaustion / short-entries.

Interim support rests at 43.73 with the immediate focus higher while above the weekly open at 43.09. A breach above the upper parallel would suggest a more meaningful lows is in place with such a scenario targeting 47 and the 50-line around ~47.50s. From a trading standpoint, I would be looking for exhaustion into slope resistance if we stretch higher first OR a buy on a pullback for one last push towards the median-line before turning lower.

• A summary of IG Client Sentiment shows traders are net-long Crude- the ratio stands at +3.97 (79.9% of traders are long) - bearish reading
• Retail has been net-long since April 19th; price has moved 16.0% lower since then
• Long positions are 2.9% lower than yesterday and 6.2% lower from last week
• Short positions are 3.1%lower than yesterday but 14.2% higher from last week
• While broader sentiment continues to point lower, it’s worth noting that positioning is more net-long than yesterday but less net-long from last week and the combination of current sentiment and recent changes offers a mixed gold trading bias. That said, the focus is on this rebound off support with the broader risk still weighted to the downside sub-45.83.