Crude oil has broken below a major price level and currently trades at $54. The following Crude Oil Elliott wave analysis suggests further price decline.
October 01, 2019 | AtoZ Markets – The Oil market closed in the third quarter of 2019 with a loss. WTI Crude Oil was trading around $61 in July but the month ended negative as the price fell to $57. In the two months that followed, the price fell to $51 before it rallied to surpass the $60 mark by $3. However, it declined to $54 at the end of September. In the last quarter of the year, the decline might continue.
Saudi Arabia is reportedly recovering from the attack which caused global Oil supply disruption. It was at first good for the market but the Saudi fast recovery, a declining global GDP and the latest US sanction on Iran is exerting pressure on Oil prices. WTI and Brent Crude have therefore been declining in the last two weeks. The market will look forward to more clues from OPEC. If the Oil cartel permits an increase in production, we might see further declining. Aside all these, the near-term technical forecast points downside and that might extend throughout 2019 Q4.
Crude Oil analysis (WTI): important price levels
Resistance Levels: $63.5 and $66.6 remain the nearest resistance levels. If these levels are breached upside, we should see a hit of $70.
Support Levels: $50.6 and $42 are the near-term support levels. The WTI price is now heading toward $50.6 level. It remains to be seen whether a big bounce will happen at $50.6 or above it before the price falls deeper.
WTI Crude Oil Elliott wave analysis
In the last update, we reckoned that a bullish correction ended around $63. We used the chart below and expected a dip below the rising trendline (broken blue).
Price has now broken below the line and will most likely hit the $50 support level. However, a minor bullish correction could first happen as the new chart below shows. The wave structure is a bit different from the above.
Price is expected to retrace toward the trendline after a proper break-away. A double zigzag pattern from $66 is emerging and could end at $45-50 price zone. WTI crude oil is expected to surge afterwards unless the reversal zone is breached very fast.