Bottom line:  WTI Crude has given its earlier gains by over 50% and print lows around 10.65 yesterday. After the historic drop last week to 0.01 levels, bears could drag prices lower towards 8.00, before finding support again.

Fundamental Outlook:

Crude Oil prices continue to slide having opened weak yesterday. WTI Crude closed nearly 25% lower around $13.00/barrel, while Brent Crude closed just below the $20.00/barrel, down 10% yesterday. The continued slide has been mainly attributed to the sluggish global demand due to COVID-19 pandemic, despite the production cut (10 million barrels per day) by OPEC.

DAX alongside Global Indices outlook remains gloomy, as it trades just below the previous high at 10600 levels. The US and Euro zone GBP figures are expected later this week (US, April 29 and Euro, April 30). The Q1 expectations remain gloomy amidst COVID-19 pandemic and lock down effects. An even worst print would trigger another round of selloff.

Gold prices have been trading back and forth the recent highs at $1747, since the last two weeks. The yellow metal has slipped below the $1700 mark today after having tested recent highs last week around $1738. With Fed Interest Rate Decision tomorrow around 02:00 PM EST, we can expect some volatile price action in the yellow metal.

Technical Analysis:

WTI Crude seems to be pulling back since printing highs around 21.00 levels in April 21, 2020. The drop looks corrective until now and it is expected to find support around 8.00 levels, which is fibonacci 0.618 retracement of the bullish bounce between 0.01 and 21.00 last week.

Structurally, the drop since 76.88 levels might be complete at 0.01 last week. The entire drop has unfolded as a zigzag structure. If bulls are able to hold prices above 0.01 levels, it could mark the beginning of a new trend, going forward.

Resistance is seen around the 28.00 mark and a break higher would confirm that trend has turned bullish. Most traders might be looking to initiate long positions around 8.00, with protective stop at 0.01 and projected targets above 28.00 respectively.

Prepared by

Harsh Japee, Technical Analyst.

WTI Crude Chart

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