WTI Crude Oil Finds Trendline Support Around $40.00 Level After Pullback

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The price of light crude oil on Wednesday pulled back to trade at around $39.57 before bouncing off the trendline support. The WTI Crude oil continues to trade within an ascending channel in the 60-min chart despite the latest pullback. It remains central in the 14-hour RSI. It is also pinned between the 100-hour and the 200-hour SMA lines.

The pullback also pushed the price of oil just below the 50% Fib level on its recovery trend. Earlier in the day, the oil price had rallied to trade around the 61.80% Fib level. 

WTI Crude Oil Fundamentals Overview

From a fundamental perspective, the price of oil is trading at the back of a relatively inactive period in the market. This explains the lack of clear directional bias in the light crude oil. Nonetheless, oil prices continue to be affected by a global slowdown in demand amid the coronavirus pandemic. Several economies have experienced a massive loss in jobs in the labor sector, which results in decreased business activity and low demand for energy.

However, the US appears to be providing some positivity to the market. Fed Chair Jerome Powell’s latest Financial Services Committee testimony suggested that the likelihood of a financial crisis in the country may be overblown amid a stable banking sector.

However, the latest EIA crude oil stocks change report missed expectations on Wednesday with -1.639 million barrels versus an estimate of -2.325 million. Earlier in the week, the US API crude oil stock balances also came in higher than the previous period with 0.691 million barrels versus -9.517 million.

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

Technically, the WTI crude oil appears to be trading within a rising channel in the 60-min chart. This indicates a short-term bullish bias in the market sentiment. The current change in trend comes at the back of a major plunge at the start of the month.

The bulls will target short-term profits at around $40.00 or higher at 61.80% Fib level at $40.50. On the other hand, the bears will look to pounce for profits at around $39.22 or lower at the 38.20% Fib level at $38.82.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the price of oil appears to have recently pulled back to trade centrally between the 50% and 61.80% Fib levels. It is now pinned between the 100-day and the 200-day SMA lines on its recovery. 

The bulls will target long-term profits at around 61.80% Fib level at$43.00 or higher at $47.70. On the other hand, the bears will target profits at the 50% Fib level at $36.17 or lower at $31.40.

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