Technical Analysis – WTI futures’ positive momentum fades

Anthony Charalambous, XM Investment Research Desk

WTI oil futures’ positive drive loses fuel as it creeps sideways below the 41.60 resistance. The slowing in the ascent is also reflected in the Ichimoku lines as their positive bearing begins to flatten out.

The short-term oscillators are grasping onto hopes that the positive picture may resume shortly. The MACD, in the positive region, holds just below its red trigger line, while the RSI is floating below the 70 mark. In the stochastic oscillator, the %K and %D lines continue to flirt with the 80 level, despite adopting a bearish tone.

To the upside, immediate constraints may emerge at the 41.60 high before the crucial 43.69 resistance, and the 200-day simple moving average (SMA) above at 44.21. Should these significant barriers fail to keep the bulls at bay, the commodity may challenge the key section from 48.80 – 49.29 before rallying towards the 54.62 peak.

Should selling interest intensify, the red Tenkan-sen line at 39.19 may hinder the price from resting at the 37.07 low, where the rising 50-day SMA currently also lies. Breaking beneath, the 34.78 support and cloud’s upper band could prove tough to get past. Steeper declines may encounter the 33.30 level, that being the 23.6% Fibonacci retracement of the up leg from 6.62 to 41.60, and the 100-day SMA at 32.25, before extending towards the 30.71 trough around the end of May.

Overall, in the short-term timeframe, the commodity remains bullish above 37.07 and conquering the vital 43.69 border may restore power in the positive picture.