WTI – Sunday Intraday Outlook: A Potential Retest of the Broken Daily Channel?

Hi everyone,

Before the market opens tonight, let's take a quick look at the shorter timeframe and see where we stand after last week's heavy sell-off.

Fundamentals – Two Very Different Stories

The market is currently caught between two competing narratives.

On one side, the US midterm elections have changed the political landscape. Democrats have taken control of both chambers of Congress, and I believe this could increase Trump's incentive to find a way out of the Iranian conflict. High energy prices are becoming a political issue, and the administration will have to consider the domestic consequences of keeping this conflict going.

However, I wouldn't be too quick to price in peace.

We are still dealing with military tensions around the Gulf and the Strait of Hormuz, and the risk of further attacks on commercial shipping remains. The diplomatic messaging and the military reality are still telling two different stories.

There is also an interesting political development in Israel. Gadi Eisenkot has been selected by President Herzog to receive the mandate to try to form a new government. But let's be clear: he is not the new prime minister yet. He still has to build a coalition and secure the necessary parliamentary support. Netanyahu remains in office in the meantime.

Personally, I think the combination of political uncertainty in Washington and Israel makes the coming weeks particularly interesting. The midterm results may increase pressure for de-escalation, but they certainly don't eliminate the possibility of another military confrontation.

Technical Picture – 30M

Looking at the chart, WTI is still trading inside the smaller rising channel that developed after the sharp decline towards the $86.50 area.

What I find particularly interesting is where this smaller channel is pointing.

Its upper projection is heading almost directly towards the major ascending trendline from our original daily channel – the one we broke below just a few days ago. In other words, a continuation of this short-term recovery could eventually bring us back to test that broken D1 structure, currently projected around $94.50–95.00.

That would be a very important technical moment. A successful reclaim could change the broader picture, while a rejection would confirm that the former support has turned into resistance.

For now, price is consolidating around $90.30, with buyers still trying to defend the lower boundary of the smaller channel.

My key levels for tonight:

• $91.00–92.00: First resistance area and a potential recovery target.

• $92.50–93.00: Intermediate resistance within the rising structure.

• $94.63: Major confluence area and potential retest of the broken daily trendline.

• $89.50–90.00: Immediate support and the area buyers need to defend.

• $87.50–86.75: Major downside support, including the previous weekly low.

My View

I am still cautiously bullish on the shorter timeframe, but I don't see a reason to chase the price here.

I'd actually like to see a proper retest of the lower channel boundary, followed by a convincing reaction from buyers. If the structure holds, the smaller channel could gradually take us towards that much more important D1 trendline retest.

On the other hand, a clean break below $89.50 would make me considerably more cautious and could open the door to another test of the $87.50–86.75 region to create some kind of double bottom.

Fundamentally, we have a market that wants to believe in de-escalation, while the situation on the ground keeps reminding us that the conflict is far from over.

And that's probably why volatility is going to remain our companion.

Let's see what Sunday night's opening brings.

Have a good trading week!

Lukas