Commodities

WTI futures struggle to extend past 103 mark, outlook neutral

WTI oil futures are trading around the mid-Bollinger band, which is currently north of the 100.00 border, after the commodity found positive traction prior to reaching the lower Bollinger band. The climbing longer-term 100- and 200-day simple moving averages (SMAs) are defending the broader bullish structure, while the 50-day SMA has yet to reflect any dominance in negative forces.

The short-term oscillators are not indicating any definitive driving forces in the black liquid, endorsing a neutral tone for now. The MACD and the RSI, which are both static around their neutral thresholds, are not transmitting any directional messages, while the positively charged stochastic oscillator is promoting positive moves in the commodity.

Noteworthy is the recent consolidation’s range, which is tightening, with the price recording lower highs and higher lows. Furthermore, the squeezing of the lower and upper Bollinger bands is suggesting that a surge in volatility is anticipated, which indicates that a more profound move in the price may unfold in the near-term.

For positive developments to be rekindled, the price would need to overstep the 50-day SMA and the adjacent 103.00 barrier, which may then reveal the next resistance obstacle at 105.40. If bullish forces intensify, the price could then challenge the upper Bollinger band at 106.93 before confronting the 109.17 nearby high. Successfully recapturing the area beyond this high may cheer buyers to propel towards the 114.08 resistance mark and the high of 116.62, recorded on March 24.

Alternatively, if the 50-day SMA and the 103.00 handle curb advances, immediate support could emanate from the mid-Bollinger band at 100.65 and the 100.00 border. Dropping lower, the price may then target the 95.27 trough and the lower Bollinger band beneath at 94.66. Next, the crucial 90.05-92.66 support section could put selling pressures to the test should sellers retain command. A break of this key barricade may then reel in the 87.45 trough.

Summarizing, WTI oil futures are exhibiting a neutral picture with a lack of directional impetus. That said, for a clearer direction to evolve, the price would need to either pilot past the 109.17 high or sink beyond the critical 90.05-92.66 support foundation.

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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