WTI oil futures (July delivery) had been in recovery mode, but the 200-day simple moving average (SMA) recently rejected their latest advance. Since then, the price plummeted to a fresh 17-month low of 64.20 before recouping some losses.
The momentum indicators currently suggest that bearish forces are subsiding but remain in control. Specifically, the stochastic oscillator is ascending after posting a bullish cross, while the MACD jumped above its trigger line in the negative area.
Should buyers re-emerge and push the price higher, immediate resistance could be met at the 75.70 hurdle. Surpassing that zone, the price may ascend to challenge the 2023 peak of 83.40. Further advances could then cease at the November 2022 high of 92.50 before the August 2022 peak of 97.70 comes under examination.
On the flipside, bearish actions could send the price to test the recent support of 69.40. A violation of that zone could open the door for the 17-month low of 64.20. Sliding beneath that floor, the price could descend towards levels not seen in the past few months, where the December 2021 low of 62.25 could provide downside protection.
In brief, WTI oil futures experienced a sharp decline and posted a fresh multi-month low, forming a bullish double-bottom pattern. For that scenario to materialize, the price needs to escape its downward sloping channel to the upside.
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