WTI Crude Carves Interim Highs Around $41.60

30 June 2020

WTI Crude might have carved a meaningful top around $41.60 levels on June 23, 2020. It has dropped to $37.00 levels since then and could be preparing to resume lower again. Bears are expected to remain in control for now, provided WTI Crude stays below the $41.60 intermediary resistance.

WTI Crude had earlier dropped to historic lows towards $0.0l levels in April 2020, not shown here. Since then, the commodity has been in control of bulls and managed to carve a series of higher highs and higher lows. The recent high was marked at $41.60 levels with RSI showing bearish divergence.

A price high along with bearish divergence on the RSI is a potential bearish formation, indicating a top. As expected, WTI Crude has dropped from $41.60 highs and is expected to continue lower towards $24.00 and $15.00 levels respectively.

Coming back to the short term wave structure, the drop from $41.60 through $37.00 could be marked as corrective Wave A. Please the subsequent rally is also clearly in 3 waves, labelled as a-b-c, and has managed to reach the fibonacci 0.618 retracement of Wave A around $40.00 yesterday.

Ideally, WTI Crude should continue dropping lower from here towards $24.00 and subsequently towards $15.00 levels as Wave C unfolds/progresses. For the above bearish structure to remain intact, WTI Crude should stay below the $41.60 interim resistance.

Also note that fibonacci extensions of Wave A highlighted here are indicating short term targets as $35.30 and $34.25 respectively. These would eventually match up with fibonacci retracements of the earlier rally between $0.01 and $41.60 respectively.

Most traders might be preparing to initiate fresh short positions around $39.00/40.00 levels, with protective stops above $41.60 and projected targets below $26.00 and $15.00 respectively.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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