WTI crude oil traded lower on Monday, after it hit resistance slightly below the 73.60 zone, marked by the high of December 9th. The black liquid has been trading in a sideways manner, between that barrier and the support of 70.55 since December 7th, but overall, it remains below the downside resistance line taken from the high of November 1st. Thus, we see more chances for a downside exit of the short-term range rather than an upside one.
A clear break below the round figure of 70.00, which is also marked by the inside swing high of December 1st, would confirm a forthcoming lower low on the 4-hour chart and may initially target the low of December 6th, at 67.65. Slightly lower lies the low of December 3rd, the break of which could see scope for extensions towards the low of December 2nd, at 62.90.
Shifting attention to our short-term oscillators, we see that the RSI just ticked below the 50 line, while the MACD, although slightly positive, lies below its trigger line. The RSI is already pointing to downside speed, but the MACD has yet to do so and that’s why we prefer to wait for a dip below 70.00 before getting more confident on the downside.
Now, in order to start examining whether the bulls have gained the upper hand, we would like to see a strong rebound back above 76.07, a resistance defined by the inside swing lows of November 19th and 23rd. This could confirm the break above the downside resistance line taken from the high of November 1st, and could initially target the 78.05 level, marked by the high of November 22nd. If that barrier doesn’t hold, we could experience advances towards the round figure of 80.00 marked by the high of November 24th, the break of which could allow for extensions towards the high of November 16th, at 81.75.
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