WTI oil futures (September delivery) have been losing ground since early June when the price failed to surpass the 121.00 mark. However, a further decline has been rejected multiple times by the 200-day simple moving average (SMA) and the price has currently adopted a rangebound pattern.
The momentum indicators suggest that near-term risks are tilted to the upside. Specifically, the stochastic oscillator is sloping upwards after posting a bearish cross, while the MACD histogram has jumped above its red signal line but remains in the negative territory.
Should the negative momentum strengthen, the price might encounter support at 94.50, which overlaps with the 200-day SMA. Sliding below that floor, the commodity could descend towards the recent low of 88.20 before the spotlight turns to 79.00. Failing to halt there, the December low of 62.30 might prove to be a tough obstacle for the bears to overcome.
On the flipside, bullish actions could propel the price towards 102.00, which is the upper boundary of the recent sideways pattern. Conquering this barricade, the bulls could aim for 114.00 before the price challenges the crucial resistance region of 121.00. An upside violation of the latter could open the door for the 14-year high of 130.50.
Overall, the recent sell-off in WTI oil futures is likely to resume, bringing the 200-day SMA under examination again. Nevertheless, a profound break above the 100 psychological mark might attract further buying interest and enable the commodity to post a strong rebound.
