$50 support level in focus: crude oil price analysis
Crude oil price analysis shows that traders are likely to sell any rallies towards the $55.00 level. A breakout under the $50.00 support level could provoke a heavy technical sell-off.
Growing fears over slowing global growth due to the spread of the coronavirus are starting to weigh heavily on the price of crude oil.
Crude oil technical analysisshows that bears could start to test towards the $50 support level as selling pressure intensifies.
Crude oil medium-term price trend
Crude oil technical analysis over the medium term shows that WTI oil is heavily bearish while trading below the $57.50 level.
Fears over slowing Chinese and global growth, due to the spread of coronavirus, have started to accelerate selling pressure towards crude oil.
The daily time frame shows that a descending triangle pattern has formed, with the bottom of the pattern located around the $50 level.
Since June 2019, buyers have been able to defend three major attacks on the $50 level. With this in mind, a break under the $50 level would be extremely bearish for crude oil.
If the breakout under the $50 support level occurs, crude oil prices could capitulate towards the $42 level fairly quickly.
Crude oil short-term price trend
Crude oil technical chart analysis indicates that a bearish head-and-shoulders pattern may be taking shape across the lower time frames.
The unwinding of the recent rally towards the $65 level early this month has helped to create a head-and-shoulders pattern.
A decline towards the $50 level would help to complete the large bearish pattern, which holds an extremely large downside projection.
The overall downside target of the pattern is around $16, and could eventually take crude oil prices towards the $34 level.
With the down move accelerating, traders may use any rallies in crude oil back towards the $55 resistance level as a major selling opportunity.
Crude oil technical analysis shows that a sustained move under the $50 support level could prompt a major technical breakdown.