WTI oil futures extended their horizontal trajectory within a broad bearish channel for another week, moving back and forth between their 20- and 50-day simple moving averages at 70.89 and 72.86 respectively.
The RSI and the MACD are trying to enter the bullish area, though given their previous failed attempts and taking into account the strengthening overbought signals coming from the stochastic oscillator, traders could stay on the sidelines.
The 50-day SMA will be closely watched on the upside, though slightly higher, the channel’s upper trendline at 75.00 could be a tougher obstacle. Then, the 200-day SMA at 78.00 could be another headache for the bulls. If the price climbs that wall, the recovery could pick up steam towards the 81.00-83.00 zone, which encapsulates the 38.2% Fibonacci retracement of the 6.62-130.50 uptrend.
In the bearish scenario, where the price tumbles below the 20-day SMA, the spotlight will fall again on the 68.35-67.00 base, which includes the 50% Fibonacci area. A continuation lower could examine the double bottom territory around 64.00, a break of which is expected to squeeze the price towards the 2021 floor of 62.00-61.50. If this collapses as well, the next stop could be near the 57.50 constraining zone, taken from the first quarter of 2021.
All in all, WTI oil futures remain directionless within a downward-sloping channel. The current neutral status may not change unless the price speeds above the channel and the 200-day SMA at 78.00 or sinks below 67.00.
