WTI crude oil has been trading north since Thursday, when it hit support near the 67.77 zone. What’s more, during the early Asian session today, the price emerged above the downside resistance line drawn from the high of July 6, and is now approaching the 71.00 barrier, marked by the peak of Aug. 4. In our view, the break above the downside resistance line has turned the short-term picture cautiously positive.
A clear a decisive break above 71.00 would confirm a forthcoming higher high on the 4-hour chart and may initially target the 72.18 level, which is near the peak of Aug. 3. If the bulls are not willing to stop there, then we could see advances towards the 73.25 barrier, the break of which could see scope for extensions towards the high of July 30, at 74.50.
Taking a look at our short-term oscillators, we see that the RSI lies above 50, near 70, and points up, while the MACD runs above both its zero and trigger lines, pointing up as well. Both indicators detect upside speed and support the notion for further advances in the black liquid.
On the downside, we would like to see a decisive retreat back below 67.17 before we start examining whether the bears have gained the upper hand. The price will already be back below the aforementioned downside line, but also below a newly drawn upside line, taken from the low of Aug. 22. Initially, we may see declines towards the low of Aug. 9, at 65.29, the break of which could allow a dive towards the 64.30 zone, defined as a support by the inside swing high of Aug. 19.