WTI Price Analysis: Remains confined in multi-day-old trading range, bulls have the upper hand

WTI Crude Oil prices extend the sideways consolidative price move on the first day of a new week.
The setup favours bulls and supports prospects for a breakout through a one-week-old trading range.
A break below the trading range support will expose last week's swing low, around $84.60-$84.55.

Haresh Menghani FXStreet

Western Texas Intermediate (WTI) Crude Oil prices ticks lower during the Asian session on Monday, albeit lack follow-through selling and currently hover around mid-$86.00s, down nearly 0.20% for the day.

Looking at the broader picture, the black liquid remains confined in a familiar trading band held over the past week or so. The prospects of tighter global supplies, along with hopes for a demand recovery in China, continue to act as a tailwind for WTI Crude Oil prices. Apart from this, a modest US Dollar (USD) retracement slide, from a six-month peak touched last week, turns out to be another factor lending some support to the USD-denominated commodity.

From a technical perspective, the range-bound price action comes on the back of the recent rally to the highest level since mid-November and might be categorized as a bullish consolidation phase. This, along with bullish oscillators, suggests that the path of least resistance for WTI Crude Oil prices is to the upside. That said, the Relative Strength Index (RSI) on the daily chart is placed near the overbought territory and holding back bulls from placing fresh bets.

Hence, it will be prudent to wait for a convincing breakout through the trading range resistance, around the $87.55 region, before positioning for any further gains. WTI Crude Oil prices might then accelerate the momentum towards the $88.00 round figure en route to the $88.60 intermediate hurdle, the $89.00 mark and the next relevant barrier near the $89.30-$89.35 zone.

On the flip side, the $86.00 round figure could protect the immediate downside ahead of the $85.60-$85.50 area, representing the lower boundary of the aforementioned trading range. A convincing break below might prompt some technical selling and pave the way for some meaningful corrective decline. The subsequent downfall might then drag WTI Crude Oil prices below the $85.00 psychological mark, towards last week's swing low, around the $84.60-$84.55 region.

WTI 4-hour chart

Technical levels to watch

WTI US OIL

Overview
Today last price	86.54
Today Daily Change	-0.17
Today Daily Change %	-0.20
Today daily open	86.71

Trends
Daily SMA20	82.09
Daily SMA50	79.42
Daily SMA100	75.5
Daily SMA200	76.22

Levels
Previous Daily High	87.38
Previous Daily Low	85.66
Previous Weekly High	87.56
Previous Weekly Low	84.58
Previous Monthly High	84.32
Previous Monthly Low	77.53
Daily Fibonacci 38.2%	86.72
Daily Fibonacci 61.8%	86.32
Daily Pivot Point S1	85.79
Daily Pivot Point S2	84.86
Daily Pivot Point S3	84.06
Daily Pivot Point R1	87.51
Daily Pivot Point R2	88.31
Daily Pivot Point R3	89.23

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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