Mon, May 29, 2023 @ 03:28 GMT
HomeContributorsTechnical AnalysisWTI Oil Futures Limit Monthly Losses; Broad Trend Bearish

WTI Oil Futures Limit Monthly Losses; Broad Trend Bearish

WTI oil futures are rising for the second consecutive week, having retraced almost half of the March downfall to re-enter the previous five-month-old range area above the 73.00 mark.

The 73.00 area will be closely watched in the short-term as the 200-period exponential moving average on the weekly chart is currently capping bullish actions around the same location. If the price crawls higher, the 50-day simple moving average (SMA) could immediately halt the recovery from stretching into the 76.80-77.50 zone. Another success here could prompt a fast rally towards the upper boundary of the bearish channel and the 200-day SMA both seen near 81.00.

From a technical perspective, the above bullish scenario is not the most likely yet. Despite the latest upturn in the price, the RSI has yet to pierce above its 50 neutral mark, while the MACD is still some distance below zero. Meanwhile, the stochastic oscillator has already reached the overbought territory above 80, flagging fading upside pressures.

In the event the price pulls below 73.00 and beneath the 20-day SMA, the spotlight will shift to the 70.00 psychological mark and the 50% Fibonacci level of 68.35. A decisive close lower could press the price straight to the channel’s lower band seen at 60.85, unless the barrier of 65.85 comes to the rescue beforehand. A bearish channel breakout could then bring the March 2021 floor of 57.30 next into view.

In a nutshell, the ongoing bullish wave in WTI oil futures has not convinced buyers yet. Downside risks may keep lingering in the background unless the price breaks above the channel and the 81.00 number.
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading