WTI Futures’ Rally Stalls Above 77 Mark

Technical analysis of Forex market

WTI oil futures have stretched towards 77.35 and are sitting above the 50-day simple moving average (SMA) at 75.71 after an upward surge from around the 66.00 mark. The positive incline in the SMAs has faded recently. However, they have yet to confirm that the trend has shifted to the downside.

The short-term oscillators are transmitting conflicting messages in directional impetus. The MACD is improving over the zero line signalling that bullish forces are still present, while the stochastic lines are dropping in overbought territory, indicating that upside momentum may be struggling. The stalling of the RSI in the bullish zone is also portraying some weakness in the upward drive.

If buying interest strengthens, the nearby upper Bollinger band could try to impede advances from testing the 79.19-80.66 resistance zone. Overcoming this barrier may encourage the bulls to then shoot for the 83.28 border before aiming to revisit the 7-year high of 85.39.

Alternatively, if the positive impetus continues to fade, immediate support could occur at the 50-day SMA at 75.71. Otherwise, the area from the 100-day SMA at 74.19 until the 72.80 barrier may prove to be the first upside defence. Sliding further, the mid-Bollinger band at 71.81 and the approaching 200-day SMA from beneath at 70.89 could act as another support obstacle ahead of the 69.20 level.

Summarizing, WTI futures are exhibiting a bullish tone, which has somewhat paused after pushing above the SMAs. Yet, downside risks could endure for a while longer should the price fail to pilot above the 79.19-80.66 resistance.