WTI oil has staged quite a strong rally from the August 2 low of 39.23 to the August 16 high of 46.71 but stopped just before the 61.8% Fibonacci retracement level at 46.88 (retracement of downleg from 51.65 to 39.23).
The market maintains a short term bullish bias after breaking above the 100-day moving average. Immediate support lies at the 50% Fibonacci at 45.43.
As long as prices remain above the 50% Fibonacci there is scope for a move higher. A break above resistance at the 61.8% Fibonacci would propel prices towards the 78.6% Fibonacci level at 48.97. RSI is bullish above 50 which supports the bullish view. Also the crossover of the 100-day moving average above the 200-day moving average is a bullish signal.
A break below 45.43 support would weaken the bullish outlook in the short term and prices could fall towards 43.96 (38.2% Fibonacci) and then 42.14 (23.6% Fibonacci). Falling below major support at the 200-day moving average at 40.85 would bring back the medium term bearish trend that took place from 51.65 (June 9) to 39.23 (August 3).
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