Crude oil prices may be about to correct lower, as upside momentum above the $40 level is starting to appear weak.
Crude oil technical analysis shows that a major technical test of key trendline support may be about to take place.
Crude oil medium-term price trend
Crude oil prices are struggling to advance above the $40 level, following the recent rejection from the $41.60 level.
Crude oil price analysis shows that sellers may be preparing to launch a technical test of key rising trendline support.
The daily time frame currently shows that the rising trendline is located around the $39.20 support level.
According to technical analysis, crude oil could fall towards the $37 area if trendline support is broken.
Looking at the upside potential, if the trendline holds firm oil prices could rally towards the $44.50 to $45 area over the medium term.
Coronavirus affects markets
Crude oil short-term price trend
Crude oil technical analysis shows that a short-term bullish bias remains in play while the price trades above the $36 level.
Crude oil technical chart analysis on the four-hour time frame shows that a rising wedge pattern has formed.
Traders should note that rising wedges are considered to be bearish reversal patterns.
The lower time frames show that a bearish breakout will take place if the $39 support level is broken.
According to the size of the rising wedge pattern, oil prices could fall towards the $37.20 and possibly the $30 level if the $39 level is broken.
Crude oil technical summary
Crude oil technical analysis shows that upside momentum is starting to fade. Bears may soon start to test back towards a key rising trendline that has been in play since April this year.
