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by Charalambos Pissouros

Is WTI Set to Continue Drifting North?

WTI traded higher on Wednesday, breaking above the resistance (now turned into support) barrier of 55.00, marked near the high of October 11th. The recovery was paused yesterday near the 56.55 level, but bearing in mind that the price structure on the 4-hour chart remains of higher peaks and higher troughs above a short-term upside line drawn from the low of October 3rd, we would expect the black liquid to continue drifting north for a while more.

A decisive break above 56.55 may confirm the case and could initially pave the way towards the 57.60 zone, which is marked by the inside swing low of September 23rd. If that level is also broken, then we may see the bulls driving the battle towards 58.90 zone, marked by an intraday swing high formed on the same day.

Looking at our short-term oscillators, we see that the RSI has flattened near its 70 line, while the MACD, although positive, stands near its trigger line, flat as well. These indicators detect slowing upside speed and suggest that a small setback may be in the works before the next leg higher.

That said, in order to start examining the bearish case, we would like to see a dip below 53.60. This could also drive the price below the upside support line taken from the low of October 3rd, and could aim for the 52.85 zone, which provided decent support between October 14th and 21st. If the sellers are not willing to stop there either, then a break lower could extend the decline towards the 51.50 zone, marked by the low of October 9th.

WTI crude oil 4-hour chart technical analysis

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