WTI oil futures are in a consolidation phase in the short-term and are pivoting around the key 47.00 level following a bounce at the end of August which ran out of steam.
The market is finding strong support at 47.00 which is where the 50-period moving average is converging. The 20-period MA is currently rising and if it crosses above the 50-period MA this would bring on a more bullish bias in the market. Since momentum oscillators are in bullish territory (RSI above 50 and MACD above zero), there is room for an upside move in prices.
Oil prices may struggle to rise above yesterday’s 47.63 high and is expected to continue moving sideways in the short term. A break above this resistance would shift the focus to the upside to target the next highs at 48.48 and 48.87 before reaching the key 50.00 level.
Alternatively, if prices fall and break below 47.00 then the neutral bias would shift to bearish to target support at 45.56 (August 31 low). Looking at the bigger picture, WTI oil has been on a downward trajectory and making lower highs since the decline from 50.19. So it remains to be seen whether the high at 47.63 is going to be another lower peak if the market moves below 45.56 to 45.38.
Overall, the short-term neutral bias is intact in the mid-47 area with a slight risk to the upside based on the bullish short-term technicals.
