WTI Oil points to August’s high, but will the bulls show up? [Video]
|WTI oil futures (October delivery) snapped the 81.00 barricade and crawled moderately back above the 20-day simple moving average (SMA), which has been capping upside movements over the past two weeks.
While the latest bullish action has turned the attention higher to the former constraining zone of 83.00 and August’s high of 84.15, a durable increase cannot be warranted. The RSI has encouragingly distanced itself above its 50 neutral mark, but the stochastic oscillator has already crossed above its 80 overbought level, signaling some persistent fear among investors. Meanwhile, the MACD is still struggling to overcome its red signal line, feeding some caution as well.
Of note, the crucial descending trendline drawn from the March 2022 highs is within breathing distance at 82.20, threatening a downside reversal. On the other hand, the golden cross between the 50- and 200-day SMAs, which is the first in three years, suggests that any negative corrections could be part of the latest bullish phase.
If the price were to re-activate its short-term uptrend above August’s peak of 84.15, immediate resistance could emerge around 86.00. A successful penetration higher might then target the 88.00 barrier, while a more aggressive pickup could retest the 89.60 zone ahead of the key 92.50 ceiling taken from October-November 2022.
Should sellers send the price below its 20-day SMA at 81.00, the 79.90 number might come first into view given the previous limitations within the neighborhood over the past month. The tentative ascending trendline, which connects the lows from June and August, could provide protection as well near 79.00, preventing any declines towards the 50-day SMA at 77.30. A step below the 200-day SMA at 76.00 could be a bigger hassle for the market.
In brief, WTI oil futures seem to be working their way to the top of the previous uptrend, though the technical picture suggests that there might be limited bullish fuel in the tank.
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.