WTI Price Analysis: 100-DMA guards the downside starting out a fresh week
- WTI recovers a part of Friday’s sell-off, with eyes on oil reserves release.
- The US oil is supported above the 100-DMA of $73.86 on the 1D chart.
- RSI sees a fresh uptick but remains below the central line.
WTI (NYMEX futures) is making a recovery attempt on the $76 level after falling as low as $74.64 earlier in the Asian session on Monday.
With the rebound, the US oil reverses a small portion of Friday’s steep sell-off, led by the European covid lockdowns and a potential release of the oil reserve by major global economies, including the US, China and Japan.
From a short-term technical perspective, WTI has stalled its correction from multi-year peaks just above the 100-Daily Moving Average (DMA) at $73.86.
The rebound comes in tandem with the 14-day Relative Strength Index (RSI) also recovering from almost two-month lows.
Despite the renewed uptick in the RSI, the indicator continues to trade within the bearish territory, suggesting that any recovery is likely to remain short-lived.
A daily closing below the 100-DMA could open floors to a sharp tumble towards the ascending 200-DMA at $69.42.
Ahead of that level, the $70 round figure could offer some reprieve to WTI buyers.
WTI: Daily chart
Alternatively, any recovery attempts could meet the initial supply at the $77 level, above which the upward-sloping 50-DMA at $78.36 would get tested.
Should the recovery momentum sustain then WTI bulls could look out for the next resistance at the bearish 21-DMA at $80.45.
WTI: Additional levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
