WTI oil futures moved north from five-month lows of 50.58 towards the 61.8% Fibonacci retracement of the down move from 66.57 to 50.58, of 60.47, over the last month. Price tumbled from the 61.8% Fibo and lost steam near its 23.6% Fibo. The 50-, 100- and 200-day simple moving averages (SMAs) in the current sideways move indicate no definite direction as their signals are unclear.
The SMAs have neared each other, whilst the MACD has had only a borderline cross of the zero line on the downside and the RSI has flattened slightly below the neutral level. However, the above indicators all suggest indecisiveness and lack of momentum in a single direction. The ADX also confirms the unclear direction.
For the picture to turn more bullish, price would need to trade through the Fibonacci levels and the SMAs and jump past the upper boundary of 61.00 before tackling the next resistance of 63.93. A test of the hurdle of the six-month high of 66.57 could then follow.
Negative scenarios would require the 38.2% Fibo of 56.68 to hold, causing price to test support of 54.80 and then the near 23.6% Fibo of 54.37. If fractured, the five-month low barrier of 50.58 could be on the table, to open the possibility of testing the eighteen-month low of 42.53 and shift the bias to bearish.
Summarizing, current oil market outlook is neutral, and any dynamic suggestion of direction would evolve on breaches of the boundary levels to the up or down side respectively.
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