WTI oil futures pause bullish party near 2018 top [Video]
|WTI oil futures (November delivery) are flirting again with the 2018 high of 76.87 thanks to the 20-day simple moving average (SMA), which has been assisting the commodity on the way up since the quick bounce near the 61.77 support area on August 23.
After a non-stop four-week-old rally, a downside correction might be on the cards, especially as the 50% Fibonacci retracement of the 2008 – 2020 downtrend at 76.80 is cementing the 2018 ceiling.
That said, the momentum indicators are keeping the bias on the positive side, suggesting there is still some bullish fuel in store before the next bearish round starts. Specifically, the RSI is maintaining its upward direction below its 70 overbought mark and the MACD continues to stretch upwards comfortably above its zero and signal lines.
If the wall around 76.87 collapses, the price could advance towards the 80.00 psychological mark, last seen in September 2014. A move higher from here could take a breather within the 83.45 – 86.45 restrictive zone before the 90.00 round-level comes under the spotlight.
Alternatively, the red Tenkan-sen line at 73.08 and the 20-day SMA at 71.47 may resume their supportive role if negative pressures resurface. Failure to hold above the latter could trigger a sharper decline towards the 67.35 handle, while lower, the 200-day SMA currently at 64.33 could come to the rescue, preventing a test of the August low of 61.77. Any step lower from here would further dampen confidence in the long-term uptrend.
Summarizing, WTI oil futures are trading at a crucial long-term resistance territory, strengthening the odds for a downside reversal, but the technical picture is still keeping optimism alive.
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