Technical Analysis – WTI oil futures pull back, but still above uptrend line
Posted on September 27, 2019 at 10:51 am GMT
Marios Hadjikyriacos, XM Investment Research Desk
WTI oil retreated in recent days, after it briefly soared to a 4-month high last week. Despite the latest pullback though, the fact that the price is still trading above an uptrend line drawn from the lows of August keeps the short-term outlook cautiously positive. That said, a break below the uptrend line and 55.30 would turn the bias to neutral.
Momentum oscillators paint a neutral picture, with the RSI being flat near its 50 level, while the MACD is also close to zero.
If the latest retreat continues, a break below the upside support line and the 55.30 area would turn the bias back to neutral, shifting attention to 52.85. Another bearish violation beneath that level would turn the picture to cautiously negative, opening the way for 50.50.
On the upside, a recovery in the price may see the bulls challenge 58.80 initially, which capped the rally both in late July and early September. Even higher, the July peak of 61.00 would be in focus, but only a clear push above 63.25 would confirm that the market is back on a healthy uptrend.
To sum up, the price structure of higher lows keeps the short-term outlook cautiously positive – though a break below the crossroads of the uptrend line and 55.30 would turn it to neutral.