WTI oil futures have broken the downtrend they started building on July 4, as they recently could not post a lower low below 43.66, flashing a potential trend reversal to the upside. Oil is currently consolidating above the key level of 45 per barrel and several indicators are giving an additional bullish signal.
In the near-term, technical indicators argue for an upside bias, as both the RSI and the MACD fluctuate in a bullish area. However, the RSI, as well as the MACD, have slowed down their speed, meaning that a potential uptrend could be weak. A bullish evidence is also given by the price crossing above the Ichimoku cloud, the 50-4-hour and slightly up the 200-4-hour exponential moving average (EMA).
Should the price head down, an immediate support could be provided by the 23.6% Fibonacci retracement level of 45.78 (upleg from 43.66 to 46.44). A second support is likely to be found around the 38.2% Fibonacci of 45.37, where the 50-4-hour EMA and a cross between the Senkoun– span A and Senkoun – Span B are also located. A steeper decline would target the 50% Fibonacci mark of 45.04.
