Commodities

Technical Analysis – WTI futures’ pullback finds traction off 200-MA

Posted on November 10, 2020 at 3:21 pm GMT

Anthony Charalambous, XM Investment Research Desk

WTI futures are confronting the 41.00 handle after finding a foothold on the 200-period simple moving average (SMA). The bearish demeanour of the SMAs looks to be fading, while the rising 50-day SMA is assisting the commodity’s bounce off the 200-day SMA.

The short-term oscillators are currently transmitting an increase in positive momentum. The MACD, some distance in the positive region, is rising above its red trigger line, while the RSI is retesting the 70 mark. Moreover, the %K line has climbed over its %D line and into overbought territory, promoting further advances in the commodity.

At the moment, immediate resistance is stemming from the 41.00 hurdle, with yesterday’s positive spike at 41.31 potentially next in line. Should buying interest surpass the previous day’s top of 41.31, the crucial section of tops from 41.57 to 41.87 may apply significant resistance to upside progress. Should this tough boundary fail to keep buyers at bay, the price may then stretch towards the 42.32 and 42.54 barriers.

If sellers resurface, early hindrance may come from the previous candle’s low at 40.34 before sellers face the 200-period SMA at 39.36, in-line with the latest trough. Diving beneath this vital border, the price may meet the 100-period SMA at 38.73 and the neighbouring support band of 38.37-38.51. Should the price slip further, the 50-period SMA at the low of 37.75 and the 37.05 trough may attempt to terminate additional declines.

Concluding, WTI futures retain a neutral-to-bullish tone above the SMAs and the 39.36 mark. A break above 41.87 may reinforce a positive picture, while a break below 37.05 may highlight negative price action.

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