Technical Analysis – WTI crude oil remains within descending channel
WTI oil holds beneath 20-day SMA
200-day SMA looks like significant resistance
WTI crude oil futures with delivery in February have been developing within a descending channel since the end of September. Currently, the market is holding beneath the 20-day simple moving average (SMA) and near the 72.00 number with strong resistance being the 74.25 barrier as well.
The MACD oscillator is travelling above its trigger line in the negative region, while the RSI is moving horizontally beneath the neutral threshold of 50. Both indicate a weakening momentum in price and only a move towards their positive territories may show some signs for recovery.
In case the price jumps above the 74.25 resistance, which is near the 50-day SMA, and breaks the channel to the upside then it may hit the 76.20 barrier and more importantly the 200-day SMA at 77.63. A successful move above this line would open the door for a bullish correction until the 80.00 psychological mark.
On the other hand, a move lower could find immediate support at 69.20 ahead of the restrictive region of 67.90-67.10. Even lower, the 64.20 barricade may halt bearish actions, remaining within the downside pattern.
All in all, oil prices are clearly in a negative direction in the medium term and only a climb above the 200-day SMA may raise optimism for an upside recovery.
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