WTI crude oil futures have moved back and forth above the 20-period simple moving average (SMA) and the 32-month peak of 71.73 since their severe jump from 61.54. The technical picture is muddled, as the RSI lacks direction, holding in the positive region, but the MACD indicates that the short-term decline would likely continue as it fell below its trigger line.
If negative forces persist, the market may find support at the 70.60 level before falling to the 40-period SMA at 70.11. If the price successfully moves lower, a retest of the previous low of 68.25 is possible to halt bearish actions, while deeper drops could meet 67.50 and the 200-day SMA at 66.44.
On the other hand, a move higher could face immediate resistance at the multi-month high of 71.73, but if the market maintains bullish momentum above this level, the 75.07 mark might be the next target, which was reached in July 2018.
When looking at the medium-term picture, oil trades above the 200-period SMA, indicating that the market is bullish. However, there is a risk of a negative correction in the very short-term as long as the indicators weaken.
