- The oil price has corrected after failing to sustain above the crucial resistance of $80.00.
- A Symmetrical Triangle formation is indicating volatility contraction in oil price.
- A recovery move in the oil price has pushed it above the 20-and 50-EMAs firmly.
West Texas Intermediate (WTI), futures on NYMEX, have failed to sustain above the crucial resistance of $80.00 in the Asian session. The oil price has corrected and dropped to near $79.46 after a firmer rally despite an upbeat market mood.
Meanwhile, selling pressure in the oil price is also backed by a recovery in the US Dollar Index (DXY). The USD Index has recovered after dropping to near 101.40 and is struggling to extend its upside journey above 101.60.
The black gold is displaying a Symmetrical Triangle chart pattern on a daily scale that indicates volatility contraction. The upward-sloping trendline of the chart pattern is placed from December 9 low at $70.27 while the downward-sloping trendline is placed from December 5 high at $82.74. The aforementioned chart pattern is a neutral triangle and results in wider ticks and heavy volume after an explosion.
A recovery move in the oil price has pushed it above the 20-and 50-period Exponential Moving Averages (EMAs) at $77.57 and $79.00, which adds to the upside filters.
The Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates that investors are awaiting the release of any potential trigger for fresh cues.
For an upside move, the oil price needs to break above the January 3 high at $81.56, which will drive the asset toward December 1 high at $83.30 followed by November 17 high around $85.00.
Alternatively, a break below January 5 low at $72.64 will drag the oil price toward December 9 low at $70.27. The asset would be exposed for more downside to near 14 December 2021 low at $69.32 after surrendering the support at December 9 low at $70.27.
WTI daily chart
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