WTI oil futures traded higher on Thursday, after hitting support near 82.35. The black liquid continues to hold above the key barrier of 81.00, but the bigger picture still points to a downtrend. WTI continues to trade below the downside line drawn from the high of June 14, as well as below the prior longer-term upside line taken from the low of April 19, 2020.
That said, the daily oscillators suggest that some further recovery may be on the cards before the next leg south, perhaps towards the crossroads of the aforementioned diagonal lines and the round figure of 90.00, marked by the high of July 5. The RSI, although below 50, has turned up again, while the MACD, despite negative, has rebounded as well and crossed above its trigger line.
If indeed the bears recharge from near the 90.00 zone, a tumble below 81.00 may follow, which will confirm a lower low and perhaps extend the downtrend towards the 73.00 territory, marked by the inside swing highs of December 9 and 13. If no buyers are found around there either, the bears may dive towards the 66.00 or 62.20 zones, marked by the lows of December 20 and 2 respectively.
The short-term outlook could start turning bullish upon a break above 97.50. If so, the price will be above both the trendlines, as well as above all three of the moving averages. The next resistance may be at 101.25, the break of which could carry advances towards the peak of July 5 at 108.15.
In brief, oil has been in a recovery mode today, but the broader trend remains to the downside. That said, a break below 81.00 may be needed to confirm a lower low and its continuation.
