WTI oil futures bounced back into the 70.00 territory after its latest downfall stalled marginally below the March 15-month low of 64.36.
While the market seems to have formed a bullish double bottom pattern in the short-term picture, flagging a potential upside trend reversal, a confirmation signal could appear significantly higher above 83.00. In other trend signals, the simple moving averages (SMAs) have yet to post bullish crosses while maintaining a downward trajectory, warning that a change in the market direction could be a long battle.
Meanwhile, the momentum indicators have shown some improvement, with the RSI pivoting higher in the bearish area and the MACD gradually strengthening towards its red signal line. However, the indicators have not entered the bullish region yet, suggesting that traders may retain some caution in the coming sessions.
The 20- and 50-day SMAs could be the first obstacles on the upside near 75.50. Surpassing that border, the spotlight will immediately fall on the 23.6% Fibonacci retracement of the 2020-2022 uptrend at 77.37. Notably, the upper boundary of the broad bearish channel is located in the same region. Therefore, a decisive close above that bar might be a prerequisite to reaching the constraining 200-day SMA at 80.70 and then the 38.2% Fibonacci retracement of the 120.87-64.36 downtrend at 83.00.
In the event the price slips below the nearby support of 73.00, it may initially test its weekly lows around 71.25 before diving towards the 50% Fibonacci mark of the 2020-2022 uptrend at 68.35. Another bearish correction below 68.00 could bring the 65.87 handle under examination ahead of the 64.36 and 63.80 lows.
Summing up, although WTI oil futures have set a bullish tone in the short-term picture, it may take some effort for the market to exit its broad negative trajectory.
