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WTI Futures Plunge But Broader Upside Risks Still In Force

WTI oil futures are trying to create a foothold at the Ichimoku cloud’s lower surface around 67.52. The aggressive loss of ground from the 74.00 mark’s vicinity over the past three days, may be somewhat attributed to rising concerns that demand for the black liquid could become sluggish as spreading of the delta variant endures. The advancing simple moving averages (SMAs) are defending the bullish structure as they keep negative powers at bay.

Currently the Ichimoku lines are not indicating any clear directional momentum, while the negative tone of the short-term oscillators, has thus far not shown any strong signs of abating. The MACD is beneath its red trigger and zero lines, while the RSI is balanced in the bearish region. The stochastic oscillator is retaining a negative charge promoting downward price developments. That said, some caution is warranted as minor slowing in the %K line is signalling that buyers are fighting back.

To the downside, preliminary support could arise from the cloud’s bottom band around 67.52 and the 100-day SMA at 67.06 approaching from beneath. If selling interest intensifies and prolongs the drop in the commodity’s price, next vital support may emerge at the July 20 trough of 65.03 and the 64.00 handle. Should these barriers fail to dismiss a deeper decline from evolving, sellers may then drive the price to test the 60.61-61.54 support band.

Otherwise, if buyers find their feet at the floor of the cloud and build some positive traction, initial resistance could transpire from the 68.89 obstacle. Climbing higher in the cloud, upside limitations could develop in the zone between the blue Kijun-sen line at 70.67 until the 50-day SMA at 71.38. Successfully floating above this resistance border and the cloud at 72.74, buyers could then target the July 30 and 13 adjacent highs of 74.22 and 74.86 respectively.

Summarizing, WTI futures are sustaining a broad bullish tone. A price hold above the 100-day SMA may feed optimism in spite of the recent price pullback, while a drop below the 65.03 trough would give negative tendencies the upper hand.