WTI oil futures stalled their rally at a 4-month high of 50.82 before entering a consolidation phase above what was a key resistance level and now support at 50.

Downside risk is limited in the near term and the market is expected to remain supported above the 20 SMA on the 4-hour chart. The fact that this moving average is rising and is above the 50 SMA gives room for more upside. Momentum oscillators are still in bullish territory although both RSI and MACD are showing a slowdown in the market’s recent upward trajectory.

Oil prices may struggle to rise above 50.82 and the market is expected to continue moving sideways in the short term below this resistance level. Clearing this top would open the way for another leg higher towards the next major peak at 51.97 (May 25 high).

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A break below key support at 50.00 would shift the focus to the downside. A Fibonacci level at 49.56 comes into view as possible support. This is the 23.6% Fibonacci retracement level of the recent uptrend from 45.56 to 50.82. The 38.2% Fibonacci at 48.79 is the next support level. This level held after several tests earlier this month. A further extension below the 50% Fibonacci at 48.18 would suggest the short-term bullish phase has ended.

In the near term, WTI is expected to remain supported in a neutral bias above 50.00. Only a move above 50.82 would see a strengthening in the recent uptrend. In the bigger picture, the medium-term trend is neutral.

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