Commodities

WTI futures hold bullish bias but strong resistance awaits at 261.8% Fibo

WTI crude oil futures has gained this week again, and it managed to hold above the 20- and 40-day simple moving averages (SMAs) and re-enter the area above 100.00.

The technical indicators are feeding prospects for a possible positive short-term trading session; the RSI holds well above 50, while the MACD continues to strengthen in bullish territory and above its red trigger line.

If the price moves higher, it could meet the 261.8% Fibonacci extension level from the down move from 100.00 to 62.27 at 122.85 again. If this level proves easy to get through, the spotlight will turn to the almost 14-month high of 130.50. Overcoming these obstacles, the high from June 2008 at 147.00 could be a crucial resistance for the bulls.

A failure to move higher could send the price down to the 20-day SMA at 105.65 ahead of the 100.00 round number, a challenging point over the last month. Lower, support could next be found around the 40-day SMA at 97.57 ahead of the uptrend line around 94.60, while a decisive close below it could stage a steeper sell-off.

In the medium-term picture, WTI futures are positive starting from the 62.27 low. Should the market continue the upward pattern, the outlook may turn brighter. A run above 130.50 would turn the outlook strongly bullish again.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).

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