Crude Oil prices tumbled last week on many factors, which put Oil prices at risk of further declines ahead, as there is no new catalyst to support the uptrend anymore.
Technical Factors
Looking at the chart of Brent and WTI Crude Oil, we can see that it managed to trade within a tight range since the beginning of this year, well below key resistance areas.
Brent crude struggled to break above 57.0 resistance area, which held since December of last year until today while Moving Averages were still positive on most time frames until last week.
WTI Crude has the same story, but of course different levels, it struggled to break above 54.50 resistance area, which also held since Mid-December of last year. Even though WTI outperformed Brent, in the end, it gave up and turned lower, posting new lows for this year.
The Technical Indicators were heavily overbought on most time frames, whether on Daily, Weekly and Monthly, which kept the chances higher for a notable retracement ahead.
Moreover, both crudes managed to break the lower line of the sideways trend as shown on the chart, which keeps the bearish outlook unchanged for the time being, meaning that there is a higher possibility for another leg lower ahead.
Read more: https://www.orbex.com/blog/2017/03/crude-oil-whats-recent-declines/