WTI futures retreat to 7-month low as negativity persists

WTI oil futures (October delivery) have been losing ground since mid-August when the price failed to surpass the 97.70 mark.  Moreover, apart from the price trading below its lower Bollinger band, the 50-day simple moving average (SMA) has dropped beneath the 200-day SMA completing a ‘death cross’, both reinforcing the thesis for a sustained bearish outlook.

The momentum indicators also suggest that near-term risks are tilted to the downside. Specifically, the stochastic oscillator is descending in the 20-oversold zone, while the MACD histogram is extending its retreat beneath both zero and its red signal line.

To the downside, further declines could cease at the seven-month low of 81.50. Dipping beneath that region, the bears could target 77.20 before the spotlight turns to the December 2021 resistance zone of 73.00. Even lower, the December support of 66.00 may prove to be a tough hurdle for the commodity to overcome.

On the flipside, bullish actions could propel the price towards the recent support zone of 85.50, which may now act as resistance. Conquering this barricade, the price might ascend towards 90.00 or higher to challenge the August peak of 97.70. A break above the latter could open the door for the 102.00 region.

Overall, WTI oil futures’ short-term picture is likely to deteriorate even further as the commodity appears to be facing tremendous downside pressure. For that bearish tone to reverse, the price needs to jump above the 97.70 ceiling.

About the author

Stefanos Oikonomidis

Stefanos bergabung XM sebagai Analis Junior pada September 2021. Ia melakukan riset pasar harian pada mata uang, komoditas dan pasar ekuitas, dari perspektif fundamental dan teknis. Sebelum bergabung di XM, ia memperoleh wawasan berharga dengan bekerja sebagai Pekerja Magang Risiko Kredit di bank besar Yunani.

Stefanos meraih gelar Master di bidang Finansial dari Warwick Business School dan gelar Sarjana di bidang Akuntansi dan Finansial dari Athens University of Economics and Business. Ia percaya bahwa untuk menjadi sukses di industri, Anda harus bisa mengidentifikasi kekuatan pendorong di balik setiap pergerakan pasar, dan dibahas secara jelas dengan para pembaca.