Commodities

Technical Analysis – WTI oil futures sank below 20-SMA; lacks direction in very short-term

Posted on April 10, 2020 at 9:54 am GMT

Melina Deltas, XM Investment Research Desk

Since its deep fall towards the multi-year low of 19.32 in the end of March, WTI oil futures have been fluctuating around the 20-day simple moving average (SMA). The technical picture supports that the selling interest is likely to remain in the short-term. The stochastic oscillator bounced off the overbought zone and is heading south, while the RSI is pointing down in the negative territory. Also, the price is trading well below the Ichimoku cloud in the daily timeframe.

Further losses could see the March 30 low of 19.32 acting as a major support. Below this line, strong psychological levels such as the 18.00, the 17.00 and the 16.00 barriers may next pause the downside momentum

Otherwise, if buyers push above the 20-day SMA, initial resistance could come from the 29.00 handle and then from the 23.6% Fibonacci retracement level of the down leg from 65.61 to 19.32 at 30.19. Climbing higher, the 40-day SMA currently at 35.33 could reject the move the 38.2% Fibo of 37.00. Above that, the 50.0% Fibo of 42.39 would also attract traders’ attention.

Summarizing, WTI oil futures are in neutral mode in the very short-term. If the price shifts below the 19.32 support, the picture would turn strongly negative in all timeframes.

WTI crude

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