WTI oil futures (July delivery) have been moving without a clear direction in the last month. Even though the commodity managed to spike above the upper end of its downward sloping channel after OPEC’s decision to cut output, the price quickly retraced lower and re-entered its long-term bearish pattern.
The momentum indicators are reflecting a cautiously positive tone. Specifically, the RSI jumped above its 50-neutral mark, while the MACD is strengthening above its red signal line but remains in the negative zone.
Should the price manage to close above its restrictive trendline, immediate resistance could be met at the 50-day simple moving average (SMA), currently at 74.80. Jumping above that zone, WTI futures may ascend towards 75.70 or higher to test the March peak of 81.00. A break above the latter could pave the way for the 2023 high of 83.40.
On the flipside, if the bulls fail to conquer the crucial technical region, the price could reverse towards the May support of 69.40. Should that barricade get violated, the spotlight could turn to the recent bottom of 67.00. A dive below that floor could open the door for the double-bottom of 64.20, which is also an 18-month low.
In brief, WTI oil futures are trading very close to the upper boundary of their long-term descending channel, attempting to post a bullish breakout. However, a failure to do so could trigger a significant retreat towards the recent lows.