Commodities

Technical Analysis – WTI futures remain close to 11-month high; indicators look weak

Posted on January 21, 2021 at 8:29 am GMT

Melina Deltas, XM Investment Research Desk

WTI crude oil futures are continuing the long-term buying interest, reaching in the previous sessions an eleven-month high of 53.94. However, the upside momentum is a bit weak as the MACD is falling beneath its trigger line in the positive area, while the RSI is flattening below the overbought zone. Both are suggesting a possible downside retracement.

If the market moves higher, the bullish action may pause initially near the 57.40-59.64 zone before attention shifts to the 65.61 resistance, taken from the peak on January 8.

On the other hand, violating the 20-day simple moving average (SMA), could see losses extending towards the 49.40 support. Even lower, the bears could stall around the 40-day SMA currently at 48.53 and the uptrend line, which overlaps with the 46.13 support. Underneath this level, the 43.46 barrier and the 23.6% Fibonacci retracement level of the up leg from 6.62 to 53.94 at 42.77 could come into view next.

In the long-term picture, WTI crude oil could continue its upside trend above 53.94, while a dive below the ascending trend line would bring a neutral-to-bearish outlook into play. It is also worth noting that the short-term SMAs keep distancing themselves above the 200-day SMA, raising optimism for a prolonged bull market.

WTI

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