WTI oil fell below the key $40 a barrel level on Monday for the first time since April. The break below the 200-day moving average accelerated the decline. Prices have stabilized today just above $40 but the bias remains to the downside.
RSI is trending down and is in bearish territory but as it is approaching oversold levels at 30, there could be some consolidation in the near term.
Just below the $40 level lies the 50% Fibonacci retracement level of the upleg from $27.45 to $51.65 (January to June move). If this important support level is broken then this would strengthen the bearish trend that has been in place since the $51.65 high of June. The next major target lies at $36.76, the 61.8% Fibonacci.
Only a move above $46 would shift the bias to neutral.
Origin: XM
