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Technical Update - How deep can the sell-off in WTI and Brent crude oil go?
Summary: The correction in WTI and Brent Crude oil is larger than anticipated
Sellers have pushed the two main oil future contracts through several Fibonacci retracement and support levels. But more selling could be seen before oil is finding solid ground. Currently medium-term bullish trends are intact
WTI Crude oil sell-off/correction seems to continuing. A minor pause at the 0.382 retracement of the entire uptrend and 0.618 retracement of the latest leg up around 84.30 only for selling pressure to continue.
Below rising trendline WTI could drop further to the 0.786 retracement of the last leg at around 81.35, possibly even down to strong support at around 77.60 which is also 0.618 retracement of the entire uptrend since June
Around that level the rising 100 and 200 Moving Averages will provide support
If WTI is finding bidders to move back above 88.20 uptrend is to resume
The medium-term bullish trend is intact unless a close below 77.60 Brent Crude oil correction and sell-off pushed the Brent future contract straight through the support and 0.618 retracement at 87.98 and now below the 0.786 retracement of the last leg up.
RSI is below 40 i.e., in negative sentiment indicating lower Brent oil levels.
A move to strong support ant 0.618 retracement of the entire uptrend since June around 81.75-81.55 seems likely. Around that level the rising 100 and 200 Moving Averages will add to the support
Medium-term bullish trend is intact unless Brent is closing below 81.75.