- WTI oil aims for some recovery but lacks confidence
- Price fluctuates within a bullish channel
- Resistance at 74.40; support at 72.70
WTI oil futures have been tip-toeing higher after last week’s steep downfall paused at the lower boundary of a short-term bullish channel. The price posted a doji green candlestick on Monday with scope to change direction higher, but gains have been limited so far, and currently constrained below the 20-day simple moving average (SMA) at 74.40.
The technical indicators cannot embrace the latest upturn in the price either. Although the stochastic oscillator has resumed its positive slope, the RSI has yet to cross above its 50 neutral mark, while the MACD hasn’t shown signs of improvement, remaining below its red signal line and close to zero.
Should the bulls pierce through the 74.40 area, the 200-day SMA and the long-term ascending trendline could cap upside movements within the 77.30-78.82 region, preventing a test at the upper band of the bullish channel at 80.20. If the price strengthens its uptrend above the channel, resistance could next develop near the 83.50 barrier.
Alternatively, a pullback below the 20-day SMA could re-examine the channel’s lower band around 72.70. A break beneath that threshold could initially stabilize somewhere between 70.00 and 69.00 and then extend towards the 67.00 constraining zone taken from May-June 2023.
Summing up, WTI oil futures cannot promise additional gains in the coming sessions, despite the latest increase in the price. A clear close above 74.00 could stimulate bullish forces, though only a new higher high above 80.00 would upgrade the bullish short-term outook.
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