Commodities

WTI futures stands below 7-year high and 90.00

WTI crude oil futures are struggling to gain positive momentum after their pullback off the seven-year high of 93.15.

The downside reversal in the RSI and the slowdown in the MACD justify the diminishing buying pressure, though both remain well above their neutral thresholds keeping the short-term risk skewed to the upside. In trend indicators, the bullish cross between 20- and 50-day simple moving averages (SMAs) is still an encouraging signal.

Should selling forces strengthen, the Fibonacci retracement levels of the 62.27–93.15 up leg will come under the spotlight. The 23.6% Fibonacci of 85.85 could initially turn support to keep the bias on the positive side after it fall (fell) below the 20-day SMA at 87.37. Moving lower, the 81.92 barrier and the 38.2% Fibo of 81.33, which encapsulates the 40-day SMA could next add some footing ahead of the 50.0% Fibonacci of 77.70, while a break lower would put the recent upside correction under examination.

Alternatively, a close above the seven-year high of 93.15 will brighten the broader outlook, pushing the price towards the 100.00 key level. Beyond that, the rally may gear up to 107.45, achieved in June 2014.In brief, oil prices are facing a weakening bullish bias in the very short-term; however, in the bigger picture the commodity is strongly positive, where a drop below the 200-day SMA at 74.08 is to enhance selling interest.

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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