Commodities

WTI futures’ bearish pressures weigh on positive structure

WTI oil futures have reached the 96.00 handle after the black liquid’s price deteriorated over the last two-weeks from the 116.62 level. It appears sellers are governing the commodity and are starting to throw some doubt on the lifespan of the bullish structure. However, this is not being reflected in the rising simple moving averages (SMAs), which continue to endorse a broader positive outlook.

The short-term oscillators are skewed to the downside as they are reflecting the recent dominance in bearish momentum. The MACD, which is sliding beneath its red trigger line, has steered into negative territory, while the RSI is heading lower in the bearish region. The negatively charged stochastic oscillator is also promoting more downward moves in the price, signalled by the dip of its %K line into oversold waters.

If the commodity maintains the current trajectory and slips below the 96.00 hurdle, the bears could then test the critical foundation shaped by the March 15 and February 25 troughs of 92.19 and 90.05 respectively, where the lower Bollinger band also resides. Should this support base fail to underpin the commodity, subsequent downside friction may then evolve around the 100-day SMA at 87.65 and the 85.00 barrier.

On the other hand, if buyers retake control and generate positive impetus from the 96.00 level, upside limitations could originate from the 50-day SMA at 99.15 and the 100.00 psychological number. Meanwhile, successfully piloting north of the 100.00 mark may propel the price to tackle the mid-Bollinger band at 103.41 and the 105.58 high. If positive pressures grow and overrun the March 30 high of 108.69, the focus may then shift towards a possible revisit of the 114.08 and the 116.62 highs, which surround the upper Bollinger band.

Summarizing, WTI oil futures’ bearish bearing is struggling to push beneath the 96.00 barrier, although negative risks have yet to fully abate. A break below the key 90.05-92.19 base could ramp up worries about a collapse of the positive structure. That said, a climb in the price north of the 108.69 barrier could reinforce upside momentum.

About the author

Anthony Charalambous

Anthony Charalambous joined XM in 2019 and specializes in preparing daily technical analysis, using his years of trading experience to provide detailed forecasting for all major asset classes such as forex, indices, commodities and equities. With over a decade of financial market exposure, Anthony previously worked in the treasury of an international bank. As he progressed through the ranks within the bank, his many roles have included treasury management, international payments and liquidity management, as well as dealing with a full range of forex products such as speculative trading with built in-house strategies that also involved prop clients.

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