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.

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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