Renews monthly low around $104.50 on breaking key support line

  • WTI remains pressured around one-month low as it breaks two-month-old support line.
  • 100-DMA, 61.8% Fibonacci retracement level may test bears but recovery remains elusive until crossing a weekly resistance line.
  • Bearish MACD, clear downside break of important support favor sellers.

WTI crude oil slumps to the lowest levels in five weeks after breaking an upward sloping trend line support from April, now resistance. That said, the black gold refreshed its monthly low by breaking the stated trend line around $104.57 before recently taking rounds to $105.20.

In addition to the trend line breakdown, the bearish MACD signals and the previous day’s pullback from the 50-DMA also suggest the energy benchmark’s further downside.

However, the 100-DMA and the 61.8% Fibonacci retracement of the April-June upside, respectively around $104.20 and $103.50, challenge the short-term downside of the WTI.

Following that, a south-run towards the $100.00 and then to May’s low near $97.20 can’t be ruled out.

Alternatively, the support-turned-resistance line around $105.90 guards immediate recovery ahead of the 50-DMA level of $109.15.

Even if the quote rises past 50-DMA, the $110.00 round figure and a one-week-old descending resistance line, around $111.40 by the press time, will be important to watch for the commodity buyers.

Overall, WTI is back on the bear’s radar after ahead of the week’s key events, namely Fed Chair Jerome Powell’s testimony and a speech from US President Joe Biden concerning oil prices.

WTI: Daily chart

Trend: Further weakness expected

.

Leave a Comment