Over the past week, the WTI crude oil market experienced intense volatility, swinging between the $65 to $75 range. Several key factors contributed to this highly volatile behavior:
Key Drivers of Recent Volatility
🔹 Global Demand Concerns
Weak manufacturing data from China and Europe reignited fears of a potential drop in global oil demand, adding bearish pressure to the market.
🔹 U.S. Crude Inventory Build
The latest EIA weekly report revealed a larger-than-expected increase in U.S. crude oil inventories, triggering additional selling pressure.
🔹 Fed Rate Cut Speculation
Growing speculation about a potential rate cut by the Federal Reserve weakened the U.S. dollar, which slightly increased demand for dollar-priced commodities like oil.
🔹 Geopolitical Tensions
Ongoing conflicts in the Middle East and threats to supply chains led to occasional price spikes due to supply-side concerns.
The combination of these factors caused crude oil to experience sharp rallies followed by rapid pullbacks multiple times throughout the week.
Technical Analysis – WTI Crude Oil (4H Chart)
The 4-hour chart shows that after a sharp rally toward the $77 region, WTI entered a corrective phase, retreating significantly back to the $64 zone.
Currently, the price is stabilizing around a key support area between $63.5 – $65.
Key Levels to Watch
✅ Major Support Zone:
$63.5 – $65 (marked with a pink box on the chart)
This zone previously acted as strong resistance and has now turned into support.
✅ Ascending Trendline:
A bullish trendline (purple) from the June lows remains intact, indicating continued buyer interest.
✅ Immediate Resistance Zone:
$66.5 – $67 is the short-term resistance level.
Price Action Insights
Recent candlesticks show a positive reaction from both the ascending trendline and the support zone, with buyers attempting to regain control.
Long lower wicks on recent candles indicate accumulation of buy orders at lower levels, suggesting potential upside momentum.
Possible Scenarios
📈 Bullish Scenario:
If price manages to break and hold above the $66.5 resistance, we could see a rally toward $68.5 and eventually $70.5.
📉 Bearish Scenario:
If the $63.5 support level fails to hold, the price could slide toward $61 and possibly $59.
Entry Confirmation Signals
Strong breakout above $66.5 with high volume → Short-term buy signal
Break and close below $63.5 → Sell signal and continuation of the downtrend
Conclusion
The crude oil market currently stands at a critical junction. On one side, buyers are defending key support zones in hopes of a reversal; on the other, sellers are watching for breakdowns to push the price lower.
The $63.5 – $66.5 range will be a decisive battleground for traders in the coming week.
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