WTI crude oil futures is continuing a seven-week rebound but with slower momentum over the last couple of days, reaching a fresh three-month peak near 40.60. The short-term bias looks overbought as the RSI pulled back from the 70 level and is heading south, while the MACD is flattening above its trigger and zero lines.
The 40.60 could be a key point for steeper bullish actions if the price manages to break the line. This is also slightly below the 61.8% Fibonacci retracement level of the down leg from 65.60 to 6.75 at 43.17 and hence should attract some attention. Higher, resistance could run towards the 200-day simple moving average (SMA) currently at 46.28, though, more buyers could be waiting to challenge the 48.80 barrier.
However, if the oil reverses to the downside, investors could find support at the 50.0% Fibonacci of 36.22, marginally above the 20-day SMA at 35.12. If the price continues to drop, support could next come somewhere near the 33.05 barrier before touching the 38.2% Fibonacci of 29.19 and the 24.50 – 26.70 area.
In the short-term picture, the bounce off 6.75 turned the outlook from negative to neutral again. Chances for another bullish move are still rising as the price stands above the bullish cross within the 20- and 40-day SMAs.
