Commodities

Technical Analysis – WTI oil futures cautiously positive; pullback steers price below 200-SMA

Posted on October 29, 2019 at 3:54 pm GMT

Anthony Charalambous, XM Investment Research Desk

WTI oil futures are leaning towards a positive short-term picture despite penetrating back below the 200-period simple moving average (SMA). The short-term oscillators are confirming a neutral-to-positive outlook unfolding, with the price now breaking back above the 200-period SMA.

The RSI’s negative momentum is easing, heading higher in the bearish territory to the neutral mark. The MACD, despite having fallen below its red trigger line, holds above the zero line. However, the Kijun-sen and 200-period SMA are adopting a horizontal stance, nearing the Ichimoku cloud, while the 50- and 100-period SMAs reflect positive signals and thus the price could be restrained within a sideways market.

To the upside, initially restricting the move up is the 55.66 level, which is the 38.2% Fibonacci retracement of the down leg from 63.22 to 50.98. Overcoming this, the swing high of 56.90 with the neighboring 50.0% Fibo at 57.10 could challenge the bulls. Next, surpassing this could rally the price to test the 61.8% Fibo of 58.56 ahead of the 59.26 resistance level.

If the bears retake control and push below the 200 and 50-period SMAs at 55.30 and 54.80, they could initially encounter a tough support area around the 53.90 level, which is where the cloud, 23.6% Fibo and the 100-period SMA reside. Further down, sellers could aim for the 52.84 swing low ahead of the support of 52.15. Even lower, the troughs of 51.37 and 50.98 could test the bears.

Overall, the short-term bias remains neutral-to-positive. However, a break above 57.10 would reinforce the positive bias while a break below 52.15 could throw it into question.

commodities oil WTI

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