Crude Oil Prices on the Rise as Weekend Nears, Here are Key Levels to Watch Next

March 18, 2022

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CRUDE OIL, WTI – TALKING POINTS:

Crude oil prices aim higher during Asia-Pacific trading session
Near-term falling trendline breakout is in focus, gains to follow?
Watch retail trader positioning, which recently flipped net-long

TECHNICAL ANALYSIS

Crude Oil Prices Rise: Crude oil prices pushed higher over the past 24 hours following steep losses since last week,
extending gains during Friday’s Asia-Pacific trading session. WTI also confirmed a breakout above a
near-term falling trendline from March 8th, opening the door to reversing the short-term downtrend.
Prices seem to have left behind key support, which is a range between 93.51 and 95.22.

Immediate resistance appears to be a combination of the 38.2% Fibonacci retracement level at 107.23
and the 50-period Simple Moving Average (SMA). Clearing these points may further open the door to
extending gains, placing the focus on the midpoint, 61.8% and 78.6% levels at 111.46, 115.70 and
121.73 respectively.

To the upside, prices may struggle to clear the 125.93 – 129.42 resistance zone, where the latter is the
current 2022 high. Downtrend resumption entails a break under the 93.51 – 95.22 support zone,
exposing the late February low at 90.05 before 86.74 comes into focus. Keep a close eye on RSI if
prices turn lower and retest the support zone, positive divergence could signal downtrend exhaustion,
hinting at a reversal.

WTI 4-HOUR CHART

OIL SENTIMENT ANALYSIS – NEUTRAL

Crude Oil Prices Rise: According to IG Client Sentiment (IGCS), 59% of retail traders are net long
WTI crude oil. IGCS tends
to behave as a contrarian indicator, meaning that prices may continue falling if downside exposure
remains elevated. Still, short bets have increased by 16.13% compared to yesterday while falling
22.91% compared to a week ago. The combination of overall positioning and recent shifts in exposure
offer a mixed trading bias.