Crude oil has remained under extreme downside pressure this week, and is now trading at its weakest level in over a year.
Crude oil technical analysis shows that a major technical breakout is underway while the price trades below the $50.50 level.
Crude oil medium-term price trend
Selling pressure has remained on the price of WTI oil this week, despite risk-on trading sentiment returning, and equity markets rallying.
Fears over weakening global demand for oil, due to the spread of the coronavirus outbreak in China, provoked a breakout under the psychological $50.00 level.
Crude oil technical chart analysis highlights that more heavy losses are likely while price trades below the $50.50 level.
The daily time frame shows that a breakout from a descending triangle pattern has taken place. The breakout has the potential to move the price of crude oil towards the $42.00 level.
It appears likely that if fears towards the coronavirus worsen, the price of crude oil could quickly slump towards the mentioned downside target.
Crude oil short-term price trend
Crude oil technical analysis shows that the lower time frames are currently as bearish as the higher time frames.
A head-and-shoulders pattern has recently been triggered into action with a huge $16.00 downside projection.
The decline below the $51.00 level has triggered the large bearish pattern, which is signalling more heavy losses for crude oil.
Given that price action remains extremely bearish, oil is in a precarious position while trading below the neckline of the bearish pattern.
Traders should note that any upside technical corrections back towards the $52.50 to $54.00 area will likely be used as a major selling opportunity.
Crude oil technical summary
Crude oil technical analysis highlights that further heavy losses remain likely while price trades below the $50.50 to $51.00 technical region.
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