WTI oil futures faced an uphill battle to consistently maintain traction above June's pivotal support trendline at 87.50, especially after Wednesday's fleeting surge to 88.55. Interestingly, the 23.6% Fibonacci retracement, marking the earlier uptrend, established itself as a formidable barrier, pegging the level at 88.50. However, a glimmer of optimism was evident as the price managed to conclude slightly over its 20-day moving average (SMA).
This positioning within the robust Bollinger band upper tier underscores that the prevailing sentiment might still lean bullish. Further affirming this perspective, the Relative Strength Index (RSI) managed to ascend past its neutral threshold of 50, albeit just over the line, signifying a budding buying interest.
Technical Indicators Showcase a Mixed Bag
While the momentum might seem favorable, some indicators suggest caution. The stochastic oscillator, which teeters on its 80 overbought demarcation, along with the MACD firmly entrenched in the negative territory, implies that the bullish cadre may be on the lookout for a decisive confirmation, ideally breaching the 88.50 barrier. Surpassing this level could embolden the buyers, potentially propelling the price towards the significant resistance arena of 91.00-91.50. This area coincides with the upward trajectory originating from the lows of 2020. If the bullish momentum garners further strength, the resistance contours might extend between the provisional trendline from the zenith of 2022 at 93.70 and the pinnacle of September at 95.00.
Potential Pullback Scenarios
Conversely, if the futures retract beneath the 20-day SMA, the price may find some semblance of balance in proximity to the 50-day SMA and the 38.2% Fibonacci level of 84.35. Delving deeper, the bearish sentiment could be tested within the bracket of 81.00-82.00. This zone harmonizes with the 50% Fibonacci and the rising trendline from June's nadir. Any further regression could incite renewed selling fervor, targeting the 200-day SMA and the 61.8% Fibonacci marker of 77.73.
Conclusion: An Awaiting Breakout
To encapsulate, while WTI oil futures exhibit potential for further gains in the near-term, the overarching trajectory might remain somewhat guarded. The pivotal 88.50 level stands out as a significant benchmark that the market is keenly watching for a definitive directional cue. As global market dynamics and technical indicators converge, the ensuing moves in WTI oil futures will be keenly observed by traders and stakeholders alike.
