West Texas Intermediate crude oil futures fell sharply lower during yesterday’s trading session and penetrated the medium-term ascending trend line to the downside. The price reached a fresh two-month low of 64.56, shifting the bullish outlook to bearish. Currently, the price is moving slightly higher while the short-term technical indicators are endorsing the scenario for a minor correction.
Looking at momentum indicators, the RSI indicator is rising after the rebound on the oversold region, while the MACD oscillator is ready for a bullish crossover with its trigger line. Moreover, the %K line of the stochastic oscillator is moving above the %D line, suggesting further gains.
In the wake of positive pressures after the aggressive sell-off, the market could meet resistance at the 65.75. A successful close above this area could see a retest of the 20-period simple moving average (SMA) in the 4-hour chart, near 66.22, while the 40-SMA near 66.63 could be the next level in focus. A stronger barrier though could be found at the 67.30 resistance barrier.
Conversely, a move to the downside could see immediate support at the 64.56 low, but should the market increase its negative momentum below this zone, the 64.00 psychological level could act as major hurdle. In case of steeper declines, WTI could breach this trough, diving to the 61.77 bottom, identified by April 6.
Turning to the medium-term picture, the market seems to be in bearish mode given that the WTI trades below the medium-term ascending trend line, which had been holding since February 9.
