WTI Price Analysis: Drops from 10-month top to snap five-day uptrend
- WTI bounces off intraday low, dropped earlier as US dollar extends Friday’s recovery moves.
- Greenback benefits from virus woes, stimulus passage amid a light calendar day.
- 10-day SMA, five-week-old support line restricts immediate downside.
WTI picks up the bids near $47.85, down 2.68% intraday, during early Monday. In doing so, the energy benchmark takes the U-turn from the highest levels since February, marked last Friday, amid US dollar gains, mainly backed by the risk-off mood and nearness to the American aid package.
Read: US Dollar Index Price Analysis: DXY bulls battle seven-week-old resistance line
Other than the fundamentals, overbought RSI conditions also favored the WTI sellers’ return. However, a confluence of 10-day SMA and an ascending trend line from mid-November, near $47.40/25, offers strong immediate support.
While the recent dip in RSI and fundamentals favor further weakness of oil prices, a sustained downside break of $47.25, also breaking the $47.00, becomes necessary for the sellers’ entry.
In a case, the WTI bears keep reins past-$47.00, November high near $46.30 and the monthly bottom near $44.00 will gain market attention.
On the flip side, the recent high near $49.45 and the $50.00 offer immediate resistance to the commodity. However, any further upside will not refrain from the February high of $54.68.
WTI daily chart
Trend: Further weakness expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
