Commodities

Technical Analysis – WTI crude oil futures on slippery mode; indicators signal bearish retracement

Posted on January 29, 2019 at 9:21 am GMT

Melina Deltas, XM Investment Research Desk

West Texas Intermediate (WTI) futures have declined beneath the 20- and 40-simple moving averages (SMAs) in the 4-hour chart, indicating possible negative retracement. Momentum signals are bearish as well, as the red Tenkan-sen line, which is below the blue Kijun-sen line, looks to be heading south, while the RSI has reversed lower, holding beneath its 50 neutral mark. Also, the MACD oscillator lies in negative zone with stronger movement than before.

Should the price continue this downward rally of the last session, the next support level for investors to have in mind is the 51.30. Slightly below this area, the 23.6% Fibonacci retracement level of the sharp downward movement from 76.90 to 42.50, around 50.65 could attract attention ahead of the 49.80 inside swing support zone, taken from the high on January 7.

On the other side, if the oil heads higher it could find nearby resistance at the 20- and 40-SMAs around 52.80 and 53.09 respectively. Further up, the price could rest around the 53.90 resistance and if there is a successful break above this barrier, the one-and-a-half-month high of 54.50 could be another pause for traders.

To sum up, oil futures returned back below the near term SMAs and the bias seems to be neutral to bearish at the moment. A decline below the 23.6% Fibonacci would switch the medium-term outlook back to negative. On the other side, a jump above 54.50 would open the way for bullish actions.

commodities WTI crude

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.