WTI futures recorded a fresh one-year low of 49.64 earlier today before turning higher, approaching the descending trend line, which has been holding since January 8.
Looking at the momentum oscillators on the 4-hour chart though, they suggest further increases may be on the cards in the short-term. The RSI has started to slope north again, while the stochastic oscillator is also heading up after it posted a bullish crossover within the %K and D% lines.
Should oil breach the descending trendline, the next resistance could come the 52.00 handle and the 40-period SMA at 52.46. Above the latter, the next target could be the 23.6% Fibonacci retracement level of the down leg from 65.51 to 49.64 near 53.38, which is located within the Ichimoku cloud.
However, if the price pulls back below the trendline, the risk would shift back to the downside, with the one-year low of 49.64 coming once again into focus. A drop below this barrier would signal a resumption of the short-term downtrend. In this case the next key support to watch is the 47.00 level, identified by the inside swing top of December 2018.
To sum up, the short-term outlook remains negative since prices hold below all moving averages and the falling trend line.
