WTI Oil futures collapse to a fresh three-month low [Video]
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WTI futures decline sharply below the 200-day SMA.
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Drop to the lowest level since July 20, but find their feet at the 75.00 handle.
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Momentum indicators touch oversold levels, hinting at potential bounce.
WTI oil futures (December delivery) have been on the retreat since their October peak of 89.85, breaking aggressively below historical support zones. On Tuesday, the price dropped more than 4.5%, sliding beneath the crucial 200-day simple moving average (SMA) before recording a fresh three-month low on the following day.
Should selling pressures persist, the price could revisit the recent three-month bottom of 75.00, which also served as resistance in June. Failing to halt there, oil futures could descend towards 72.60, a level that held its ground both in January and February of 2023. A break below that zone could set the stage for the triple bottom of 67.00.
On the flipside, if the price attempts to stage a recovery, initial advances could encounter resistance at the August support of 77.60, which coincides with the 200-day SMA. Violating that territory, oil could challenge the 80.20 hurdle. Even higher, the April peak of 83.40 may prove to be a tough obstacle for the bulls to overcome.
In brief, WTI oil futures remain under relentless downside pressure, recording consecutive lower lows. However, traders should not rule out a bounce to the upside as the short-term oscillators are dangerously approaching oversold conditions.
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