First, we will see a breach of 39.93 - 40.05 support followed by a fall to the 38.07 - 38.35 level. Note that the Fibonacci extensions seem to be aligned with the key support levels of 2008 lows (shown by the black horizontal lines). Second, after reaching the 38.07 - 38.35 level the price may recover, and attempt to breach the 39.93 - 40.05 level. Given the assumption, prices are not expected to successfully recover above this level. It is unclear how far the price will fall after hitting 39.93-40.05 level, and a discussion on whether the price will drop all the way to $35 or $34.69 seems to be rather far-fetched at this moment given the high level of uncertainty that the markets faces.
A few factors that are favorable towards the manifestation of such moves are;
1. Continued uncertainty in the equity markets: Equity indices are often examined as an indicator that represents the aggregate demand by policy makers and economists.
2. USDCAD: As a matter of fact, if USDCAD remains , it may negate some of the effect that a lower dollar index has on crude oil - Load up the charts and look at the correlation.
3. A continued increase in production OR stagnation in the level of tight oil plays: This is because the US oil market is oversupplied despite the consoildation and reduction in exploration and production activities.