WTI oil futures rallied to a fresh 3-year high of 64.86 on Monday after successfully rebounding off the 63 level. The underlying trend remains bullish but in the near term, prices are making a correction lower. Upside momentum has weakened, and RSI is turning back down on the 4-hour chart.
The market has dipped below what was support at the 64 level and any additional losses would shift the focus to the next support level at 63. To the upside, immediate resistance is seen at the round figure level of 65.
Following the sharp rise to the 65 handle, the market is expected to take a breather and pull back. The near-term picture looks more consolidative, with downside risk expected to be limited to the 63 handle.
In the bigger picture, the bullish move that began from late December after the rebound from the mid-58 area is still in progress and there are no signs of a reversal in the trend as long as the market remains above the key 60 level.
