Oil futures retreated from a one-and-a-half-month high of 54.50 on Tuesday, touching the 20-simple moving average (SMA) in the 4-hour chart. The very short-term bias looks negative as the MACD keeps losing ground below its red signal line, while the RSI seems to be making its way down to retest its 50-neutral mark.
Should bearish dynamics dominate, the market might decline below the 53.25 key support and the near-term uptrend line to challenge the 40-SMA currently at 52.35. Below that, the area around 50.65, the 23.6% Fibonacci retracement level of the downleg from 76.90 to 42.50, could be another potential barrier in focus, while steeper declines may overcome that point to test 49.80.
On the flipside, if the price manages to rebound on 53.25, nearby resistance could come from the previous peak of 54.50. Further up, the market could rest around the 38.2% Fibonacci region of 55.64, while slightly above, the 55.85 hurdle could come next in focus.
To summarize, oil futures currently stand in a bullish correction within a four-month negative structure. The short-term outlook could shift to a more positive one if there was a successful close above 38.2% Fibonacci.
