WTI crude oil futures have come under renewed selling pressure, falling back below the 38.2% Fibonacci retracement level of the downward wave from 36.22 to 6.75 at 18.03. The technical indicators, though, are sending some bullish signals, suggesting that the softness in the market may pause.
The RSI has reversed higher near oversold levels, slightly above 30 indicating that the market could weaken its bearish structure a little bit in the short-term. Stochastics are still in oversold territory, posting a bullish crossover within its %K and %D lines in the 4-hour chart. The Ichimoku indicators are also raising bearish flags as the red Tenkan-sen line is below the blue Kijun-sen line and is currently pointing to the downside.
Should the market decline, support is coming from the 6.75 level, before the price challenges the next psychological marks such as 6.00, 5.00 and 4.00.
However, if the market manages to pick up speed, the 23.6% Fibonacci retracement level of the down leg from 36.22 to 6.75 at 13.68 could offer nearby resistance ahead of the 20-day SMA which currently stands at 14.92 slightly below the 40-day SMA at 15.91 near the Ichimoku cloud. A significant close above the latter would break the 38.2% Fibo at 18.03 and the 50.0% Fibo of 21.53, raising chances for bullish corrections.
In the medium-term, the outlook remains negative since prices hold below all the moving average lines and the bearish cross between the 20- and the 200-day SMA stays in place in the daily chart.
