WTI crude oil futures have been in a somewhat negative correction mode over the last couple of sessions after the aggressive upside rally towards the seven-year high of 79.76 on Wednesday.
Regarding the technical indicators, the MACD oscillator is losing ground in the positive region and is approaching its trigger line for a possible bearish crossover. Moreover, the RSI is heading south after the jump to the overbought territory. The red Tenkan-sen line is sloping down above the blue Kijun-sen line; however, the 20- and 40-day simple moving averages (SMAs) are still moving higher.
Should prices keep moving lower, immediate support could come at 72.86, which the 20-day SMA also lies. Below that, the 23.6% Fibonacci retracement level of the upward wave from 34.02 to 79.76 at 68.93 is another major support. A drop below this area would take the commodity closer to the 200-day SMA currently at 65.00 and significantly weaken the bullish long-term structure. Further losses would open the way towards the 62.30 barrier, which is the 38.2% Fibonacci.
To the upside, there is immediate resistance at the multi-year high of 79.76, while above that, the next major resistance to watch is the 86.39 barrier, taken from the inside swing low in April 2013.
To conclude, crude oil prices have been in a strong upside structure since October 2020 and only declines underneath the 200-day SMA at 65.00 and the 61.8% Fibonacci at 51.40 may shift the outlook to neutral.
