The price of WTI crude oil has finally surged higher after hitting a 17-month low of 65.70, following a period of intense selling pressure from the 78.75 resistance level. In the past three weeks, the commodity has experienced a significant 16% decline, leading to a shift in the outlook towards a bearish trend.
Technical indicators suggest that the MACD is showing signs of a reversal in its negative momentum and is starting to trend upwards. Additionally, the stochastic oscillator has begun to move northward after a bullish crossover within its %K and %D lines in the oversold territory. These indicators collectively indicate a potential end to the strong selling pressure.
If the current upward momentum continues, the price of oil could encounter resistance at the 70.00 psychological level, followed by barriers at 71.30 and 72.70. Further upside movement may face obstacles at the short-term descending trend line at 76.60, coinciding with the 50-day SMA, after surpassing the uptrend line and the 20-day SMA.
On the downside, a break below the multi-month low could trigger a more pronounced sell-off, potentially targeting the next support level derived from the April 2023 low at 63.60.
In summary, oil prices have been on a significant downtrend since July 3, and only a breakthrough above the 84.70 resistance level could prompt a shift in the outlook towards a bullish trend.