WTI crude oil is moving sideways as it retests the broken resistance and now support at the $52.25 per barrel level. A bounce off this area of interest could take the commodity back to the latest highs at $54 per barrel.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is more likely to hold than to break. The 200 SMA also lines up with this support zone to add to its strength as a floor. A break below it could send crude oil to the next lows at $50 per barrel.
RSI is still heading lower to signal that there’s some selling pressure left in play. This could be enough to spur a downside break of support and further declines. However, the oscillator is also nearing the oversold region so sellers might let buyers take over in a bit.
Stochastic is already in the oversold territory and is starting to turn higher to signal a possible return in bullish pressure. Stronger momentum could even take crude oil past the latest highs and onto a prolonged uptrend.
Crude oil has tossed and turned along with market sentiment and expectations of an OPEC output deal. It has been reported that Nigeria and Libya are on board with plans to curb production for the next three to six months, at least according to remarks from Oman’s oil minister. Russia is also reportedly joining in, likely adding to upward pressure on prices.
Recall that the cartel already had a production deal in place since January 2017 and has since extended this deal in an effort to keep prices afloat. However, there has still been a lot of downside pressure coming from oversupply and expectations of slower energy demand on account of trade tension, both weighing on crude oil prices.