Technical Analysis – WTI crude oil opens the way for bearish actions
WTI drops below diagonal line
20- and 200-day SMAs post death cross
RSI flattens and Stochastics hold in oversold region
WTI crude oil with delivery in July is plummeting from the 80.00 level, which is acting as a strong resistance obstacle as well as the 200-day simple moving average (SMA). The commodity slipped beneath the medium-term ascending trend line, suggesting more declines in the market.
To attract new buyers, the bulls will have to surpass the nearby resistance of the uptrend line at 78.20 and move beyond the bearish cross within the 20- and the 200-day SMAs near the 80 level. Another successful battle there could see the price jumping to the 50-day SMA at 81.40.
However, the mixed technical indicators are not convincing traders of the bullish scenario. The narrowing SMAs indicate a potential downside move but the direction is unclear as the flattening RSI is suggesting the end of bearish action, but the stochastic oscillator keeps lacking power in the oversold region.
Hence, a downside correction could still be possible in the coming sessions. If the pair slumps below the 76.58-75.80 range, it could stabilize near the 71.50 mark. Otherwise, the sell-off could expand towards the 70.60 support disappointing medium-term traders.
Summing up, oil prices have not eliminated downside risks yet, as they remain beneath important barriers. To boost buying confidence, WTI will need to crawl above 80.00 level.Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
