WTI crude oil continues to slide lower, as the commodity remains pinned below a descending trend line that has been capping gains since late April.
Price is currently trading around $89.38 per barrel and appears to be extending its losses after failing to sustain a recovery attempt near the $95.00 area earlier in June.
The Fibonacci extension tool drawn from the swing high near $97.15 down to the recent lows highlights where sellers could be waiting to re-enter on any corrective bounce. The 38.2% Fib level sits at $89.93, which is just above current price and lines up closely with the descending trend line resistance.
A slightly larger decline could reach the 50% Fib at $87.71, while a more extended selloff might test the 61.8% level at $85.48. The 76.4% Fib at $82.72 and the full extension at $78.26 mark deeper support floors if selling pressure intensifies.
On the moving averages front, the 100 SMA has crossed below the 200 SMA, confirming that the path of least resistance is to the downside and that the selloff is more likely to gain traction from here. Both indicators are sloping lower and acting as dynamic resistance overhead, adding further weight to the bearish case.
Stochastic has tumbled from the overbought region and is now hovering near the oversold area, suggesting that sellers have been dominant in the most recent leg down. If the oscillator turns up from current levels, a short-term bounce toward the Fibonacci retracement levels and descending trend line could materialize before the downtrend resumes.
RSI is similarly pressing into oversold territory and still has some room to slide, keeping the door open for additional losses. A dead cat bounce back toward the 38.2%–50% Fib zone could offer sellers a more favorable entry point to rejoin the broader downtrend.
WTI crude oil appears to be waiting on further geopolitical developments surrounding the US-Iran conflict that could influence global supply conditions. Escalating tensions could mean more upside for the energy commodity while strengthening odds of a peace deal could unwind the war premium.