WTI Oil collapses 3% – Selloff as Ukraine-Russia war nears resolution

Some reports from Axios have emitted the possibility of the Russia-Ukraine war going towards a US-led year-end resolution.

Some of this could have been anticipated – Volodymyr Zelenskyy announced yesterday that paths to direct discussion with Russia could reopen and that Ukraine is “preparing to reinvigorate negotiations”.

So the overnight report could just be one of diplomatic progress, in a US attempt to provide a plan similar Peace Plan as the one that was agreed in Gaza. The rest will be to see if both sides actually commit to the discussions.

The direct effect was some imminent selling in Oil and related products, with Black Gold down $1.80 from its highs, or very close to 3%.

An argument could be that the war continuing was also a bearish catalyst, with Russia flooding Markets to sponsor its attacks on Ukraine.

So if the war ends, could supply drastically reduce? Would it necessarily lead to a rebound?

This could be an opportunity to fade the news but will be contingent on many other factors, the most important being positioning and how prices actually move at the news.

So let's take a look at that precisely in a multi-timeframe US Oil (WTI) technical analysis

Oil still evolves within its Main Descending Channel formed throughout July and actually hangs around its middle, indicating somewhat of a balance in the price action.

Current trading remains within the May range between $59 and $60.5 that acts as long-timeframe support but also as imminent consolidation zone.

The RSI tilting towards the lower part gives the bears a slight technical advantage, but as long as the Daily Momentum remains above the 40 level, it's still largely considered neutral, implying further rangebound action.

Still remaining in a downwards channel, the action keeps a slight bearish but balanced tilt.

Let's dive deeper in the charts.

Levels to place on your WTI charts:

Resistance Levels

• Key September Resistance $65 to $66
• Sep High timeframe Pivot $62 to $63
• $60.90 Weekly highs

Support Levels

• $59 to $60.50 2021 Support now Pivot (attempting to break)
• $55 to $57 2025 Support
• Oct 20 lows $56.38
• $57.50 Hourly channel lows
• Past Week lows $58.265

Sellers are making a move to push below the $59 support mentioned on the higher timeframe and could test the previous week lows at $58.56.

Keep an eye on the Hourly channel bounds which tend to act as strong support and resistance levels.

The 1H RSI is coming towards oversold, therefore continuation here would imply that sellers are keeping the short-term hand.

Watch what happens when and if prices reach the past week lows support ($58 to $58.50).

Safe Trades!

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