WTI crude rebounded from $ 57.27 on Tuesday, forming a higher low on the technical charts. However, so far the rise has been limited to $ 58.50.
On the 1-hour chart, multiple candles with long wicks indicate uptrend fatigue. That, coupled with a reading above the 70 or overbought level on the 14-day RSI, suggests that there is scope for a price decline.
The upward sloping 10-day simple moving average, currently at $ 55.63, is the support to take into account in the short term. A close below the 10-day SMA would invalidate the bullish outlook.
However, fundamentals seem lined up in favor of a continued rally. According to the Wall Street Journal, a faster-than-expected decline in oil inventories accumulated during the coronavirus pandemic is driving the oil rally. Prices are up 11% this month.
Additional gains can be seen if demand, which has already picked up in India and China, picks up in developed economies. South Korea said early Wednesday it would release 100 million barrels of oil reserves if there is a supply shortage.
WTI 1 hour chart
WTI technical levels
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