WTI crude oil futures have been consolidating within a narrow range over the last week with upper boundary the 23.6% Fibonacci retracement level of the downward wave 54.70-20.50 at 28.58 and lower boundary the multi-year low of 20.50.
This sideways move is confirmed by the technical indicators. The RSI is flattening near its 50 level, while the stochastic is turning slightly lower in the overbought territory. However, the Ichimoku lines are moving lower in the 4-hour chart.
Immediate resistance, in case of some gains, could come from the 20-period simple moving average (SMA) currently at 26.06, near the Ichimoku cloud. More upside pressure would drive the market to the 23.6% Fibonacci mark of 28.58, before touching the 30.80 level.
On the other hand, additional declines may send oil lower again, below the 40-period SMA, finding support at the multi-year trough of 20.50. More losses could extend the bearish outlook towards the 20.00 round number.
Summarising, the market has maintained sharp bearish sentiment since January and only a rally above 65.00 could change this outlook in the medium-term.
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