HomeContributorsTechnical AnalysisWTI Oil Futures Consolidate Around Key 57 Level After Rally Loses Steam

WTI Oil Futures Consolidate Around Key 57 Level After Rally Loses Steam

WTI oil futures have paused after a strong rally from 49.07 to 57.89. The market reached overbought levels on the 4-hour chart, as indicated by RSI rising above 70, and consequently, prices corrected lower and fell below the key 57.00 level.

A falling RSI is tilting immediate risk to the downside. A dip in the market would target the 23.6% Fibonacci retracement level (55.81) of the rise from 49.07 to 57.89.

If prices can remain above yesterday’s low of 56.28 during the next few sessions then the risk of a deeper pullback will diminish. Staying above dynamic support provided by the 50-period moving average would help stabilize the market.

The market needs to rise above key resistance at 57.00 to push momentum back to the upside to see a re-test of 57.89 and clearing this would confirm the uptrend. A move back below the 50% Fibonacci (53.47) would end the broader uptrend.

The neutral bias is expected to hold in the near-term and prices are likely to consolidate around the key 57.00 level. Overall, the three moving averages (50, 100 and 200-period) are positively aligned and rising, which is keeping the bigger picture bullish.

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