WTI oil futures sustain bullish bias but with some caution

WTI oil futures (December delivery) are set to close with mild gains for the third consecutive week after struggling to successfully enter the 90 territory.

While the positive trajectory in the momentum indicators promotes a bullish continuation, the 90.57-92.32, which includes the 20- and 50-period simple moving averages (SMAs) on the weekly chart, could ruin further progress. A decisive close above that region would mark a new higher high in the chart, boosting hopes for a positive trend reversal. If that were the case, the spotlight would turn to the flattening 200-day SMA at 97.40, a break of which could lift the price up to the 100.50-101.50 resistance area.

If sellers return, the price could pull into the 85.80-85.00 support region, where the short-term descending trendline drawn from the nine-month low of 76.25 is placed. Another move lower could test the 81.25-80.00 constraining zone before meeting the broken descending trendline near the 76.25 low.

In brief, WTI oil futures are indicating persistent buying appetite, though some caution is required as the price seems to be testing a key resistance area. 

About the author

Christina Parthenidou

Christina joined the XM investment research department in May 2017. She holds a master degree in Economics and Business from the Erasmus University Rotterdam with a specialization in International economics. Previously, she earned a bachelor of science in Economics from the University of Cyprus. Apart from foreign exchange markets, her research interests include the impact of International trade on labour markets and product development.