WTI futures create downside rally towards long-term ascending trend line.
West Texas Intermediate oil futures plunged over the last sessions, moving towards the long-term ascending trend line in the 4-hour chart. Also, they hold below the 20- and 40- simple moving averages (SMAs), while the technical indicators are confirming the recent negative structure in the near-term. The RSI indicator is pointing south, having just fallen below the 30 oversold zones, and the MACD oscillator just recorded a bearish cross with its trigger line.
Should the price manage to strengthen its negative momentum and post a significant leg lower, the 50.0% Fibonacci retracement level of the up-leg from 58.15 to 76.90, around 67.50, could be the next support level to have in mind. A break below this area could drive prices towards the 66.95 support, which stands near the rising trend line. A negative rally below this line could shift the long-term bullish outlook to a more neutral one, hitting the 65.70 level.
On the flipside, if prices rebound and surpass 68.50, the 38.2% Fibonacci of 69.70 could come in focus again. Further advances could drive oil until the 69.90 resistance and then at the 70.64 level, taken from the low on October 12.
To summarise, WTI crude looks bearish in the short-term, while in the longer-term picture, it has been strongly positive since February 2018.
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