WTI oil prices saw a boost on Monday due to increased tensions in the Middle East, leading to concerns about the oil supply. The price opened higher, recovering from last week’s low but staying within a narrow range.
However, technical indicators on the daily chart suggest that there may be limited potential for a strong recovery. Key resistance levels at $78.31/39, including the daily cloud base and the 200-day moving average, are expected to prevent significant price increases and maintain a bearish bias in the short term.
Over the past three weeks, oil prices have been on a downward trend and are likely to close the month of July on a bearish note. This trend, combined with negative momentum on the daily chart and bearish moving averages (with a potential death-cross formation), indicates that selling opportunities may outweigh buying opportunities.
To confirm a bearish signal, the price would need to consistently stay below $77.06 and potentially target the next support levels at $75.30/00. On the other hand, a break above the 200-day moving average could signal a shift in momentum and open the door for a stronger correction.
Key resistance levels to watch include $77.67, $78.39, $78.59, and $79.13, while support levels are at $77.06, $76.02, $75.30, and $75.00.
While the geopolitical tensions are driving the current price movements, traders should also consider other factors such as global demand, production levels, and economic indicators that could influence the future direction of oil prices. It is essential to stay informed and monitor the market closely to make well-informed trading decisions.
