Head and shoulders pattern points to $8.00: Crude oil price analysis
Crude oil price analysis shows that a further decline towards the $8.00 level remains possible. A breakout below the $20.00 level would be extremely bearish for oil.
Crude oil has continued its recent multi-week decline, with prices moving ever closer to a breakout below the $20.00 level.
Crude oil price analysis shows that a bearish head and shoulders pattern is signalling further losses towards the $8.00 level.
Crude oil medium-term price trend
Crude oil prices have fallen to their weakest trading level in nearly two decades, marking a loss of nearly 70 per cent from its current 2020 trading high.
Traders and investors are becoming more bearish towards oil prices due to the crippling effect the coronavirus is having on the global economy.
Crude oil technical chart analysis highlights that a breakout below the $20.00 level could spark a stronger decline towards the $8.00 level.
The daily time frame shows that a large head and shoulders pattern was activated when the $42.00 level was breached.
Key upcoming support below the $20.00 level is currently found at the $16.40 and $10.70 levels.
Crude oil short-term price trend
Crude oil technical analysis shows that a bearish short-term bias is in force while price trades below the $30.00 level.
A near-term recovery may be about to take hold, due to the presence of bullish MACD price divergence on the lower time frame.
The bullish MACD price divergence extends towards the $26.60 level. This may be an area that sellers will look to enter into the prevailing trend.
A bullish inverted head and shoulders pattern will form across the lower time frames with a $15.00 upside projection if price reaches the $35.00 level.
If oil prices do recover towards the $35.00 level it would encourage the notion that a long-term bottom in oil price was formed this week.
Crude oil technical summary
Crude oil technical analysis highlights that further heavy losses remain likely while price trades below the $30.00 level. A bearish pattern is warning that oil prices may fall towards the $8.00 level.