West Texas Intermediate, WTI, has rallied towards a key resistance area as the following charts will illustrate. However, while a subsequent sell-off might be expected while on the front side of the bearish trendline resistance, there has been a firm layer of support put together near $74.00. Nevertheless, while below $77.00, the bias is to the downside.

The prospects of a continuation of the correction toward $75.50s are good once $72.24 highs are cleared. However, given the firm support put in on the previous test to the downside, there is an even probability of a bullish continuation that could eventually take out the trendline resistance and open risks of a grind to the upside beyond $77.00 in a long squeeze back towards $79.00.

Oli price came under increased pressure after loss of pivotal supports at $80 and $79.00, with fresh acceleration lower, turning technical studies on daily chart to bearish setup and adding to negative near-term outlook.

Bears found a temporary footstep at $73.93 Fibo support (50% retracement of $64.34/$83.51 rally) and ahead of the top of thick daily cloud at $73.49, with oversold conditions suggesting a pause in the latest bear-leg from $79.15 (Apr 24 lower top).

With fundamentals remaining negative for oil, technical buying on partial profit-taking, may keep bears on hold for consolidation / mild correction.

Solid barriers at $76.19/73 (broken Fibo 38.2% / 100DMA) should ideally cap, with stronger upticks not to exceed falling 10DMA ($78.29) to keep bears in play.

Fresh bears also filled the gap of Apr 3, adding to negative signals, although firm break of $73.93 level is needed to confirm the signal and open way for attack at next targets at $71.66 (Fibo 61.8% of $64.34/$83.51) and $70.00 (psychological).

The WTI contract is also on track for the second consecutive weekly loss, which contributes to negative near-term structure.

WTI under immense bearish pressure for now

Apr 30 2023