Technical Analysis – WTI oil futures plummet to fresh 17-month low
2023.05.04 07:22
WTI oil futures (June delivery) had been in recovery mode since they encountered strong support in mid-March. However, the commodity retraced lower after the 200-day simple moving average (SMA) rejected further advances, re-entering its downward sloping channel and posting a fresh 17-month low of 63.80 in today’s session before recouping some losses.
The momentum indicators currently suggest that bearish forces are reigning supreme. Specifically, the MACD histogram is softening below both zero and its red signal line, while the RSI has flatlined slightly above the 30-oversold mark.
If sellers attempt to push the price lower, the March 2023 bottom of 64.36 could act as the first line of defense. A violation of that territory may open the door for the December 2021 low of 62.25. Failing to halt there, the price could then descend towards the 60.00 psychological mark.
On the flipside, bullish actions could propel the price towards the 72.60 support region, which could serve as resistance in the future. Should that barricade fail, the bulls might attack the 75.70 congested region that includes the 50-day SMA and the upper bound of the descending channel. Further advances could then cease at the 2023 peak of 83.40.
In brief, WTI oil futures experienced a sharp decline and posted a fresh multi-month low after their latest rebound got rejected. For the short-term bearish picture to alter, the price needs to jump above its descending channel.
