WTI crude futures trade around 2-week high; bullish bias but the possibility of an overstretched rally.
WTI crude oil futures have reversed back up again after finding support at the 38.2% Fibonacci retracement level of 61.41 of the down-leg from 66.60 to 58.15 and reached a two-week high of 62.82 today. Prices successfully broke above the 50.0% Fibonacci and are trading above their moving averages in the 4-hour chart.
The bullish picture in the short-term is supported by the MACD, however, the stochastic oscillator is signaling a possible bearish correction. The MACD oscillator is rising in the positive zone above its trigger line, while the stochastic oscillator is creating a bearish cross within its %K and %D lines in the overbought territory.
Should prices reverse lower, immediate support could some at 20-simple moving average (SMA) near 61.90 before it slips towards the 38.2% Fibonacci mark of 61.41. Further losses would open the way towards the 60.15 support level.
To the upside, there is a significant psychological resistance level at 63.00, which is acting as a major obstacle. A jump above this area could push the oil towards the 61.8% Fibonacci level of 63.40. A break above it would shift the short-term outlook to bullish as it would take the price to 64.20 taken from the high on February 26.
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