WTI Crude Oil Finds Strong Resistance After End of Week Rally

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The WTI Crude oil price on Friday failed to extend the current gains after meeting strong resistance around the $40.00-$41.00 key level. The oil price bounced back late on Thursday after a massive plunge in the middle of the week took it below the $39.00 level.

This recovery pushed oil prices above the 100-hour and the 200-hour SMA lines in the 60-min chart. It also pushed the price light crude oil closer to overbought levels of the 14-hour RSI.

WTI Crude Oil Fundamentals Overview

Oil prices appear to have stabilized after a highly volatile period instigated by the coronavirus pandemic. However, with fears of a second wave of the deadly virus still ravaging markets, it is possible that the current stability could be short-lived. In addition, the OPEC+ extended production cuts will expire at the end of this month and that has already prevented oil prices from gaining past the $40.00 level. The latest US economic data might also play a part in guiding the short-term movement of oil prices. Traders should keep on eye on it. This week’s data was relatively mixed.

Earlier in the week, the US API crude oil stocks for the week ending July 3 came in at 2M up from -8.156M barrels in the previous week. And on Wednesday, the EIA crude oil Stocks change for the period missed the expectation of -3.114M with 5.654M barrels up from the previous week’s change of -7.195M barrels.

WTI Crude Oil Technical Analysis (the 60-min Chart)

Technically, the WTI Crude Oil appears to have recently made a sharp recovery after plunging earlier in the week. The recovery met strong resistance around the $40.00 level on Friday, which continues to stand firm since the start of the month. 

The bears will be targeting short-term pullback profits at around $39.94 or lower at $38.93. On the other hand, the bulls will look to extend profits above the resistance level at $40.00 by targeting $41.64 or higher at $42.48.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the WTI Crude Oil appears to be trading within a sharply rising curve in a bid to recover from the January to April plunge. The light crude oil is now pinned just below the 61.80% Fib level on the way up. It trades just off the overbought levels of the 14-day RSI.

The bulls will look to extend recovery towards $46.58 or higher at 76.40% Fib level at $51.96. On the other hand, the bears will target profits at around 38.20% and 23.60% Fib levels at $35.84 and $20.63, respectively.

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