Oil, Natural Gas, and US Dollar Technical Analysis: Recession Fears and Technical Breakdowns

Oil prices continue to trade lower as US tariffs and trade war risks weigh on global demand expectations. Brent crude oil (BCO) has dropped to $60 per barrel, breaking long-term support at $70. Meanwhile, WTI crude oil (CL) has broken long-term support at $66. This breakdown signals that bearish momentum in the oil market is likely to continue. Additionally, rising recession fears further increase the downside risk for oil prices.

OPEC+ recently agreed to raise output by 411,000 barrels per day in May. This increase is much higher than the previous pace of supply hikes. The Saudis appear less willing to act as swing producers and may push for larger increases in June. Their shift suggests they are adapting to long-term low prices rather than resisting the decline. This decision could further suppress prices if demand weakens due to fears of recession.

Moreover, US shale production is under pressure. Drillers are slowing activity due to falling prices and tariff-related uncertainty. Citi warned that if WTI falls below $60, up to 75 rigs could shut down, reversing production growth. Meanwhile, the situation in Russia further worsens the outlook. With interest rates at 21%, Russia faces severe budget stress. The Economy Ministry projects Brent could drop to $50 by 2026 if the trade war continues. Ukrainian attacks on Russian infrastructure also threaten exports to India and China. This instability creates a highly bearish environment for oil markets.

WTI Crude Oil (CL) Technical Analysis

WTI Oil Daily Chart – Bearish Pressure

The daily chart for WTI crude oil shows that the price has broken from a bearish triangle pattern and fallen sharply to the $55 area. The rejection at $72.50 and break below the triangle highlight strong bearish pressure. The 50-day and 200-day moving averages are sloping downward, confirming bearish momentum. Moreover, RSI remains below 40, indicating weak strength and oversold conditions. A minor bounce is visible, but the broader trend stays negative unless oil reclaims $66.

WTI Oil 4-Hour Chart – Descending Broadening Wedge

The 4-hour chart for WTI crude oil also shows the bearish trend. The chart shows a descending broadening wedge, followed by a bearish rising wedge, which signaled a reversal. Price rejected multiple times below $67 and then collapsed toward $54. Moreover, RSI rebounded from oversold levels and now shows a mild recovery. However, the current price action remains weak below $60. The broader trend stays bearish unless oil reclaims the $67-$70 range.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Key Level of $3

The daily chart for natural gas (NG) shows the formation of the classic cup and handle pattern. This pattern confirms a bullish setup. The price broke above the $3 neckline but faced resistance near $4. After a pullback, it found support at $3 and the 200-day SMA. A bullish engulfing candle near $2.80 triggered a sharp rebound. The price now trades near $3.60 and tests the 50-day SMA. Moreover, RSI has recovered above 50, showing improved momentum. If the price breaks $3.60, the upper channel may be retested at around $5.

Natural Gas 4-Hour Chart – Ascending Channel

The 4-hour chart for natural gas shows the formation of an ascending channel before breaking down and hitting strong support near $3. The price has formed a double bottom at this level and rebounded sharply. The rally pushed prices back above $3.60, testing the lower boundary of the broken channel. Moreover, the RSI has surged above 60, confirming bullish momentum. A sustained move above $3.60 may revalidate the uptrend. However, rejection here could trigger a retest of the $3 support zone.

US Dollar (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows that the index broke down sharply after forming a rounded top near the 107 level. The breakdown below 103.50 triggered heavy selling, and the price fell to a low near 99. RSI confirmed the weakness by dropping below 40. The index is now attempting a rebound but faces resistance at 100.65. The 50-day and 200-day moving averages are trending lower, adding bearish pressure.

US Dollar 4-Hour Chart – Inverted Head and Shoulders

The 4-hour chart for the US Dollar Index shows that the index trades in a descending channel and faced repeated rejections near 107 and 102.75. After hitting the lower boundary, it formed an inverted head and shoulders near 99, signaling a potential reversal. Moreover, RSI has recovered above 50, showing improving momentum. A breakout above 101 may confirm trend reversal, while failure to break could resume the bearish channel.