WTI Crude Could Drop Towards $34.00

14 July 2020

WTI Crude might be preparing to turn lower towards $34.00 at least, over the short term. The commodity had reversed sharply from $40.50/60 through $39.00 levels yesterday. Bears are looking to remain in control from here.

The potential wave counts are as follows: The drop from $41.60 through $37.05 was in 5 waves, impulse Wave 1 on the chart. As usually the guideline suggests, a 5 wave structure is followed by a 3 wave structure in the opposite direction.

WTI Crude rally from $37.06 through $41.07 was in 3 waves, hence corrective. Also note that the counter trend rally managed to reach fibonacci 0.786 retracement of Wave 1, seen around $41.00. The above termination has been labelled as Wave 2 on the chart here.

If the above counts are correct, WTI Crude should ideally stay below $41.07 mark and reverse lower towards $34.00, going forward. Only a break above $41.70 would change the intermediary bearish structure. Immediate resistance is seen around $41.60 levels.

Going further, the drop from $41.07 through $38.50 could be lower degree wave I within wave 3 lower. The subsequent rally towards $40.60 could be labelled as lower degree wave ii. If the above lower degree counts are correct, WTI Crude should stay below $40.60, going forward.

Further, the commodity should turn lower towards $34.00 levels from here. Also note that potential remains for a push towards $26.00 levels, going further. In short, WTI Crude is expected to remain bearish until prices stay below $41.60/70.

Trade with
Abans Global

• Authorised and Regulated by FCA
• Customer Support 24/5
• Low Spread & Commission
• Instant Execution
• No Dealing Desk