WTI Price Analysis: Oil price drops below $80.00 within immediate bearish channel

• WTI crude oil extends the week-start retreat within a fortnight-old bearish channel.
• Downside break of rising support line from Wednesday, looming bear cross on MACD also favor energy sellers.
• Oil price recovery needs validation from 100-SMA and US data to recall commodity buyers.

WTI crude oil remains pressured for the second consecutive day as sellers attack the 200-SMA support amid the early hours of Tuesday’s European session. In doing so, the black gold justifies an immediate support break while reversing from the upper line of a two-week-long descending trend channel, down 0.20% on a day near $79.65 at the latest.

Apart from the reversal from the channel’s resistance and a downside break of an ascending trend line from the last Wednesday, an impending bear cross on the MACD indicator joins the RSI (14) line’s retreat to keep the Oil sellers hopeful.

However, a clear break of the 200-SMA level of $79.55 becomes necessary for sellers to keep control.

Following that, the double bottoms marked on August 03 and 17, around $78.60–50, will challenge the energy benchmark sellers.

In a case where the black gold remains bearish past $78.50, the odds of witnessing a slump towards the stated channel’s bottom line, close to $76.80 at the latest, can’t be ruled out.

Meanwhile, a convergence of the previous support line and the bearish channel’s top line restricts the immediate upside of the WTI crude oil price near the $80.00 threshold.

Even if the Oil price remains firmer past $80.00, the 100-SMA and late August swing high could test the buyers around $80.80 and $81.70 in that order.

Apart from the technical details, the looming US data about inflation and employment, as well as the weekly Oil inventories, also appear crucial to determine the short-term WTI moves.

Also read: Crude Oil Futures: Further consolidation in the pipeline

WTI crude oil: Four-hour chart

Trend: Limited downside expected