Commodities

Technical Analysis – WTI futures price squeezed between the moving averages

Posted on July 30, 2019 at 8:25 am GMT

Anthony Charalambous, XM Investment Research Desk

WTI oil futures have been flirting with the 200-day simple moving average (SMA) but were unable to close above it over the last week after finding support at the 54.80 level. The price seems to be caught between the 20-, 60- and 200-day SMAs in a sideways market that has lasted two-months, with formed candles which show no clear direction.

The ADX indicator suggests a trading range is in place, whilst the 20-, 60- and 200-day SMAs have converged showing further uncertainty to the price direction. The MACD and the RSI are flat at the zero line and the 50 level respectively, showing absent momentum in any single direction.

For moves to the upside, the coupled 20- and 60-day SMAs around 57.50 could initially come into play before the 58.54 level, which is the 50.0% Fibo of the down move from 66.57 to 50.58. Next in line is 60.47, the 61.8% Fibo, and slightly higher the resistance hurdle of 61.00. Further displacement may bring to light the six-month high of 66.57 once the 63.93 resistance is surpassed.

For the bearish picture, the SMAs would need to hold and push the price of oil below the 56.68 level, which is the 38.2% Fibo, so that the support of 54.80 can be retested. A continued move through 54.37, the 23.6% Fibo, could draw the attention to the five-month low of 50.58.

Summarizing, the short-term oil price is neutral for now, and a break of the range boundaries above (61.00) or below (50.58) would cement the next direction.

commodities WTI

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