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Technical Analysis – WTI oil futures surge back to 80



  • WTI oil futures swiftly recoup June’s lost ground to trade again above 80

  • Technical signals return to positive area, but there is another barrier nearby

 

Hopes of increased demand in the next quarter caused WTI oil futures to surge back to 80.60, erasing earlier losses that led the price to a four-month low of 72.46 two weeks ago.

The bullish action lifted the price back above its 50- and 200-day simple moving averages (SMAs), pushing the RSI index above its 50 neutral mark as well. The odds for a bullish continuation are technically high, but the bulls need to close above the resistance line at 80.70 to encourage more buying towards the next trendline zone of 82.85-83.00. A successful penetration higher could bring April’s bar of 84.85 under the spotlight.

Should the bullish enthusiasm quickly diminish, the 50- and 200-day SMAs might offer some initial support around 79.30. If not, the price could slip into the 77.35-77.85 region, a break of which could cause a sharper decline towards the 75.17 number. If the 74.12 area gives way too, the sell-off could next pause near the recent low of 72.50 or perhaps around the 72.00 psychological mark.

In summary, WTI oil futures have entered a new bullish phase, and there is a possibility of a further increase if the bulls can surpass the 80.70 level.

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