WTI crude oil futures have been underperforming over the last couple of days, remaining within the short-term moving averages and the Ichimoku cloud in the 4-hour chart. The RSI and the MACD oscillator are moving sideways near the 50 and the zero lines respectively, suggesting a neutral performance on price action.
Should oil price manage to strengthen its positive momentum and jump above the 40-simple moving average (SMA), immediate resistance could come around the 23.6% Fibonacci of the low of 50.60 to the high of 60.27 around 58.00. A break above this level would touch the 58.50 resistance and then 59.40, taken from the peak on July 2, while also exiting from the cloud.
However, if prices are unable to break the upper surface of the Ichimoku cloud in the next few sessions, the risk would shift to the downside, with the 38.2% Fibo of 56.56 coming into focus. A decline below it would hit the 56.00 mark, taken from the latest lows. This action would create a narrow range of 56.00 – 58.50 in the oil market and only a close below the aforementioned obstacle (56.00) could turn the bias to negative.
Over the last month, WTI is trying to post some gains, however, the bounce off the five-week high of 60.27 delayed this scenario. Traders should be waiting for the price to exit from the Ichimoku cloud for a clear direction.