Commodities

Technical Analysis – WTI futures bearish despite pause ahead of 19.00 handle

Posted on April 16, 2020 at 8:32 am GMT

Anthony Charalambous, XM Investment Research Desk

WTI crude oil futures appears to be tilting negative again as it pierced just below the February 1999 level of 19.25 by plotting a new low of 19.19. Confirming the bearish sentiment is the RSI, which in the bearish area is slipping towards its 30 point, while the MACD, deep in negative territory, is looking to retake its red trigger line.

Furthermore, with the prevailing negative outlook painted by the diving simple moving averages (SMAs) and the still intact bearish mode of the Ichimoku lines, the odds are favouring more deterioration in the commodity. That said some caution of the flattened red Tenkan-sen line is warranted in case momentum picks up.

If sellers continue on their path, first constrictions to the downside may come from the 19.25 and 19.19 fresh lows. A drop down could rest at the 2002 year low of 18.00 before testing the 2001 year bottom of 17.50. Weakening further, the 1995 year low of 16.86 could challenge the bears before concerned traders start to turn their focus to the 15.00 and 14.00 marks.

Otherwise if buying interest picks up, initial resistance could come from the 21.83 obstacle ahead of the 23.53 level and nearby Tenkan-sen line at 24.12. Moving up the 28.29 and 29.04 highs could prevent the price testing the lower surface of the Ichimoku cloud and the inside swing low of 30.48. A jump higher could be challenged by the 34.25 resistance and 50-day SMA at 35.90 ahead of the 36.92 level, that being the 38.2% Fibonacci retracement of the down leg from 65.61 to 19.19.

Overall, the short-term picture remains strongly bearish below the SMAs and the 34.25 high, while the near-term is neutral-to-bearish below 29.04.

oil

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