WTI has been trading within a sideways range between 64.00 and 73.75 since the 10th of April, and thus we would consider the medium-term picture to be neutral for now. However, as far as the bigger outlook is concerned, the black liquid continues to trade above the long-term uptrend line drawn from the low of the 21st of June 2017.
Since Friday, the price has been getting rejected near the 68.65 barrier and today, the bulls appear willing to make another attempt for driving the battle above that territory. If they manage to do so, then we may see them targeting our next resistance of 70.65, defined by the peak of the 13th of July and the inside swing low of the 6th of the month. Another break above that barrier may prompt extensions towards the 72.90 level, or the upper bound of the aforementioned medium-term range at around 73.75.
That said, even if this is the case, WTI would still be trading within the medium-term sideways range. We would like to see a decisive close above the range’s upper end of 73.75 before we get confident that the prevailing long-term uptrend has resumed.
Looking at our daily momentum studies, we see that the RSI rebounded from slightly above 30 and now looks to be heading towards 50, while the MACD, although below both its zero and trigger lines, shows signs that it could start bottoming as well. These indicators support somewhat the case for the price to continue higher, at least within the medium-term range.
On the downside, a break below 66.30 could set the stage for the crossroads of the 64.00 zone, the range’s lower bound, and the long-term uptrend line drawn from the low of the 21st of June 2017. Having said that though, we would still see a decent chance for the bulls to jump in from that zone. We would prefer to wait for a clear break below 64.00 before we start examining the case of a trend reversal. Such a dip may signal the completion of a double top formation on the daily and weekly charts and could initially aim for our next support of 61.90, near the low of the 6th of April.
