WTI oil futures correct sharply higher but some caution still in play
|WTI oil futures (December delivery) found immediate support near the 79.83 level following the bearish breakout below the trendline on Wednesday.
Today’s upside reversal helped the RSI bounce on its 50 neutral mark and stay within the bullish area, though the cautious mood may not fade away unless the price returns above the trendline. The weakness in the MACD and the negative slope in the Stochastics are currently flagging that the bears are still in town. The falling red Tenkan-sen line is also reflecting some anxiety among buyers.
If the trendline at 82.60 proves easy to snap, the bulls will push for a close above the crucial resistance zone of 84.38 – 85.45. A victorious win here would bring the 90.00 level next on the radar.
Otherwise, should the floor around 79.83 collapse, with the price closing below the 79.00 mark too, where the blue Kijun-sen line is positioned and the 200-period SMA is flattening in the four-hour chart, the sell-off could stretch towards the 38.2% Fibonacci of 76.39. The 50-day SMA is converging to the same region, increasing the odds for another sharp downfall - likely towards the 50% Fibonacci of 73.63 - should the bears violate that base too.
All in all, despite the latest upswing in WTI oil futures, negative risks continue to linger in the background. A clear extension above the trendline would reduce downside risks.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.