West Texas Intermediate (WTI) crude oil is pulling back after posting gains in the previous two trading sessions, with prices trading near $82.20 during European hours. The decline comes as the market reassesses short-term momentum following WTI’s inability to maintain its position above the nine-day Exponential Moving Average (EMA).
The following article explores the topic in greater depth, with insights from Praxes Group’s brokers.
WTI remains technically bullish, trading within an ascending daily channel. The current decline appears to be a short-term correction rather than a trend reversal. The key level is the 50-day EMA at $81.69. Holding above it supports the bullish setup, while a break below could trigger a deeper retracement.
Nine-Day EMA Becomes Immediate Resistance
WTI’s move below the nine-day EMA represents an important near-term technical development. The short-term moving average currently stands around $82.75 and has become the first major resistance level that bulls need to reclaim.
A successful recovery above $82.75 would indicate that the latest decline is losing momentum and could restore the market’s immediate bullish bias. Such a move would also suggest that buyers remain willing to defend the broader ascending-channel structure.
If WTI manages to regain the nine-day EMA and sustain trading above it, attention could shift toward the upper boundary of the ascending channel near $90.40. This represents a substantial upside objective from current levels and would reinforce the continuation of the broader recovery.
Beyond $90.40, traders could focus on the nearly three-month high of $92.25, recorded on July 23. A sustained move through this previous high would strengthen the bullish technical outlook and potentially establish a new upward leg.
RSI Signals Neutral Momentum
Momentum indicators currently offer a more balanced signal. The 14-day Relative Strength Index (RSI) is positioned around 51, placing it close to the neutral 50 threshold.
The reading suggests that neither buyers nor sellers have a decisive momentum advantage at present. Importantly, the RSI has cooled from previously overbought conditions, reducing the risk that the market is excessively stretched on the upside.
An RSI near 51 can therefore be interpreted as a period of technical normalization rather than an outright bearish signal. If the indicator begins turning higher while WTI reclaims the nine-day EMA, it could provide additional confirmation of renewed buying pressure.
$81.69 Support Holds the Key
On the downside, the 50-day EMA at $81.69 is the most important immediate support level. WTI’s position above this longer-term moving average remains a major reason why the broader technical bias is still considered constructive.
A rebound from $81.69 would demonstrate that buyers are defending the medium-term trend and could create the foundation for another attempt at the $82.75 nine-day EMA.
Below the 50-day EMA, additional support is located around $80.80, corresponding to the lower boundary of the ascending channel. This creates an important support confluence between the moving average and channel structure.
A sustained break below $80.80 would materially weaken the current bullish configuration. Such a move could indicate that WTI is transitioning from a controlled correction into a more pronounced bearish phase.
Deeper Downside Risks Below the Channel
If WTI decisively breaks beneath the $81.69-$80.80 support zone, the next major downside targets would become increasingly important.
The first broader objective would be the seven-week low near $72.53. A move toward this level would represent a significant deterioration in the technical structure and would suggest that the ascending-channel recovery has failed.
Further weakness could expose the six-month low of $67.09, recorded on July 2. Reaching this level would require a substantial deterioration in both price momentum and market sentiment, making it a longer-term bearish target rather than the immediate base case.
For now, however, the market remains above these distant levels, meaning traders are likely to concentrate primarily on the $81.69 support and $82.75 resistance.
WTI Price Forecast
From a technical perspective, the WTI outlook remains cautiously bullish above $81.69. The price’s continued position inside the ascending channel, combined with its location above the 50-day EMA, suggests that the broader recovery remains intact despite the recent pullback.
The immediate bullish trigger is a recovery above the nine-day EMA at $82.75. If achieved, WTI could advance toward $90.40, followed by the $92.25 July high.
On the other hand, a decisive break below $81.69 and subsequently $80.80 would undermine the bullish structure and expose WTI to significantly deeper losses toward $72.53 and potentially $67.09.
For now, the technical picture is best characterized as bullish in the medium term but neutral in the immediate term, with $81.69-$80.80 serving as the critical downside zone and $82.75 acting as the key upside hurdle.