- WTI futures break above crucial trendline and 50-day SMA
- Next target is the 61.8% Fibo, which held strong in January
- Momentum indicators tilt to the positive side
WTI oil futures (March delivery) had been on the retreat since their September peak of 95.02, breaking below consecutive support zones. Although the price managed to halt its retreat and erase some of its losses, the 61.8% Fibonacci retracement of the 64.20-95.02 upleg has rejected further advances.
If bullish pressures persist, oil might challenge the 61.8% Fibo of 75.97, a level that curbed the price’s recovery in December. Conquering this barricade, the bulls could attack the 50.0% Fibo of 79.61. Further upside moves could then stall around the 38.2% Fibo of 83.25.
On the flipside, should the price reverse back below its 50-day simple moving average (SMA), the 78.6% Fibo of 70.80 could act as the first line of defence. A successful break below that zone could pave the way for the 66.95-68.00 support range defined by June lows and the recent six-month bottom. Failing to halt there, the price may face the 2023 low of 64.20.
In brief, WTI oil futures have been steadily gaining ground in the near term, attempting to extend their short-term recovery. For that to happen, the price needs to initially jump above the crucial 61.8% Fibo of 75.97.
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