WTI oil futures shifted to a more bearish bias after breaking below the psychological level at 50. The short-term outlook points to further weakness in the market since technical signals are bearish.
On the 4-hour chart, both MACD and RSI are in bearish territory. The 20 and 50-period moving averages are negatively aligned and sloping down, while prices are trading below them.
The market paused its decline at a key area, just above the 50% Fibonacci retracement level of the upleg from 45.56 to 52.83. This level at 49.17 is expected to act as support.
To the upside, the 20-period MA will likely provide resistance around 49.83. Should prices rise above this level, more resistance is expected at the key 50 level, as it is both a psychological level as well as the 38.2% Fibonacci retracement level. The October 5 high at 51.20 will be an important target since it acted as both support and resistance in the past and is also the 23.6% Fibonacci. Above this, prices would test the 52.83 peak.
Falling below the 50% Fibonacci would put WTI oil futures under more pressure and see the market starting to reverse the August to September uptrend to target the next major low at 46.95 and then 45.56.
The short-term analysis on the 4-hour chart showed the market is at a pivotal point now and is expected to consolidate just above the 50% Fibonacci. The short-term bearish outlook is still in play and the decline from 52.83 is expected to continue as long as prices are capped by the 20-period MA.