Technical Analysis – WTI futures resume downward trajectory

WTI oil futures’ negative pressures resurfaced today, guiding the price of the black liquid down towards a three-month low of 66.51 on growing worries related to the new omicron variant of the coronavirus. The diving simple moving averages (SMAs) are endorsing the bearish bearing in the pair.

The Ichimoku lines are currently indicating a pause in the negative drive, while the short-term oscillators are conveying unconvincing mixed messages in directional impetus. The MACD is far below zero and is falling further below its red trigger line. The RSI is flirting with the 30 oversold mark, while the stochastic oscillator is promoting questionable upside strength in the commodity.

As things stand, sellers are tackling the support zone of 66.51-67.39. Should the bears steer the price below this three-month low, then the August 24 barrier of 65.40 could come into focus ahead of the 64.00 handle. If selling interest endures, the price of oil may then deteriorate towards the August 23 trough of 61.77.

In the event oil appreciates significantly, initial upside constraints could evolve at the 68.86 barrier and the red Tenkan-sen line at 69.72. Moving higher, the 71.18 boundary could impede the price from challenging the 72.80-73.13 resistance band. Overstepping this could boost buyers’ confidence, encouraging them to overshoot the Ichimoku cloud and the 74.21 obstacle to battle the 74.75-75.31 critical resistance border.

Summarizing, WTI oil futures are exhibiting a strong bearish bias in the near-term picture, below the 72.80 high. That said, for the commodity to regain a bullish tone, the price would need to return above the 79.00 hurdle.

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