WTI Oil Futures Power Up To 70 But Some Caution Remains

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WTI oil futures (September delivery) bounced strongly close to the critical resistance turning support zone of 66.65 late on Wednesday, quickly recovering most of Monday’s losses to return above the 70.00 level.

The sprint saved the marked from a short-term deterioration in the medium term, but in the short-term window, the price is still structurally in a bearish corrective mode below the 76.20 peak.

As for the price momentum, although the high upside reversal in the stochastics promotes further recovery in the market, some negative risks remain in the background as the RSI has yet to pierce above its 50-neutral mark despite the latest sharp rise in the price . . The MACD has also not been able to strengthen above its zero and signal lines, suggesting that bearish interest is still intact.

The 50-day simple moving average (SMA) and the blue Kijun-sen-line currently limit movements within the 70.00 – 70.60 area. Therefore, after they give way, the door would open for the 72.00 mark and the 20-day SMA slightly higher. Further gains from here may test the resistance territory 74.60 before extending to the 76.20 peak and the 2018 peak of 76.87.

If selling pressures return, the bears may try to break the 66.65 floor and drive to the bottom of the Ichimoku cloud seen at 65.00. A lower move could feed a sharper decline to 63.60, while below that, the focus will shift to the May low of 61.54.

Overall, WTI’s oil futures remain exposed to negative corrections despite Wednesday’s rally. A sustainable move above 70.00 could encourage more buying, while a fall below 66.65 could activate new sales orders.

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