WTI oil futures in bearish phase but maintain medium-term neutral outlook

brent_1WTI oil futures have unwound almost all of the gains made from the recent rally off the key 57 level. The near-term bias is to the downside and last Friday’s 58.86 high remains unchallenged.

Technicals are bearish on the 4-hour chart. The market has dropped below the 20 and 50-period moving averages which are negatively aligned. The RSI has fallen below 50.

Prices are expected to grind lower with the next target at the key 57 level. This level has held strong support during the past two weeks, keeping the market neutral in the medium-term. A break below 57 would strengthen the bearish momentum to target previous lows at 55.72 and 54.79.

Only a clear break above 58.35 would open the way for a re-test of the more than two-year high of 59.02. The odds for clearing this peak are low in the near term.

The medium-term neutral outlook is expected to remain in place with more range trading above the 57 base as the market enters a consolidation phase following the rally from 54.79 to 59.02.

Origin: XM

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