Crude Oil Prices have plummeted more than 15% off the June highs with WTI now probing a key support zone near the June close lows. These are the updated targets and invalidation levels that matter on the crude oil price charts (WTI). Review this week's Strategy Webinar for an in-depth breakdown of this oil price setup and more.

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Crude Oil Price Chart - WTI Daily

Technical Outlook: In my latest Oil Price Weekly Outlook we highlighted the continued downside risk in WTI while noting that a break below support at 54.53 was, “needed to mark resumption targeting 51.60 backed by more significant support at the January reversal close at 48.24- look for a bigger reaction there IF reached.” Price is probing confluence support today at 51.03/67- a region defined by the 61.8% retracement of the late-2018 advance and the 61.8% extension of the decline off the yearly high- looking for a reaction here.

Crude Oil Price Chart – WTI 240min

Notes: A closer look at oil price action shows WTI trading within the confine of a descendingpitchfork formation extending off the June / July highs with an embedded channel off last week’s high continuing to govern price action. A break below this threshold keeps the focus on subsequent support objectives around ~50.08 and the lower parallel / 48.14/24. Initial resistance now 52.58 backed by 53.75 – bearish invalidation now lowered to the weekly open at 55.21.

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Bottom line: The oil price sell-off is testing support targets here at 51.03/67 – watch today’s close. From a trading standpoint, a good spot to trim short-exposure / lower protective stop. We’ll be on the lookout for possible downside exhaustion on a stretch lower towards downtrend support.

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Crude Oil Trader Sentiment

A summary of IG Client Sentiment shows traders are net-long Crude Oil - the ratio stands at +1.71 (63.1% of traders are long) – bearish reading

T raders have remained net-long since Jul y 12 th ; price has moved 14.2% lower since then

Long positions are 8.9% higher than yesterday and 11.5% higher from last week

Short positions are 10.8% higher than yesterday and 7.8% lower from last week

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Yet p ositioning is less net-long than yesterday but more net-long from last week and t he combination of current positioning and recent changes gives us a further mixed Oil price trading bias from a sentiment standpoint.

See how shifts in Crude Oil retail positioning are impacting trend- Learn more about sentiment!

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- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex