H&S confirmation favors Oil sellers below $79.00

• WTI crude oil prints four-day losing streak while confirming bearish chart formation.
• Sustained trading beneath the key SMAs, bearish MACD signals join Head-and-Shoulders to favor energy bears.
• Six-week-old horizontal support zone can prod WTI bears before directing them toward $71.00 theoretical target.
• Oil buyers remain off the table below $81.40.

WTI crude oil prints mild losses around $78.40 heading into Thursday’s European session. In doing so, the black gold drops for the fourth consecutive day as markets await top-tier US data and central bankers’ speech at the Jackson Hole Symposium.

The energy benchmark’s latest losses could be linked to the downside break of the 200-SMA, as well as confirmation of the Head-and-Shoulders (H&S) bearish chart formation. Adding strength to the downside bias are the bearish MACD signals

It’s worth noting, however, that the market’s cautious mood and the RSI (14) line’s condition below 50.0 suggests limited downside room for the commodity prices, which in turn highlights a 1.5-month-old horizontal support zone surrounding $77.20–$76.80.

In a case where the WTI bears conquer the $76.80 mark and manage to hold the reins afterward, the mid-July swing low of around $73.80 will act as the final defense of the Oil buyers before pushing the quote toward the theoretical targets of the H&S bearish pattern, near $71.00.

Alternatively, the neckline of the H&S formation and the 200-SMA, respectively near $78.90 and $79.20, guard the immediate upside of the WTI crude oil.

Following that, a downward-sloping resistance line from August 10 and the 100-SMA could challenge around $80.70 and $81.00 in that order.

Even if the quote manages to remain firmer past $81.00, the weekly peak surrounding $81.40 can check the buyers before giving them control.

WTI crude oil: Four-hour chart

Trend: Further downside expected