- WTI extends correction below the $42 mark.
- Covid-led oil demand concerns, IEA report drag oil lower.
- Rising wedge breakdown spotted on the hourly chart.
WTI (futures on NYMEX) is looking to extend its corrective slide from two-month highs of $43.05 in the European session.
At the time of writing, the US oil sheds 0.80% to trade at $41.40, swiftly recovering from a dip to $41.25 lows. The extension of the retreat in the black gold can be mainly attributed to the intensifying fears of the coronavirus contagion, which casts a dark cloud on the oil demand prospects.
Further, the latest monthly report from the International Energy Agency (IEA) cited that there would be no major oil demand boost from vaccine breakthrough in the first half of the next year. The bleak demand outlook for oil remains a cause for concern for oil bulls.
Technical outlook
From a short-term perspective, WTI has charted a rising wedge breakdown on the hourly sticks, with the bias remaining to the downside in the session ahead.
A test of the 100-hourly moving average at $40.43 is inevitable should the sellers find acceptance below the $41 mark.
The hourly Relative Strength Index (RSI) looks south at $41.45, heading towards the oversold territory, allowing more room for declines.
On the flip side, immediate resistance is aligned at $41.90, the confluence of the 21 and 50-HMAs.
A break above the latter could see the extension of the recovery towards the pattern support now turned resistance at $42.35.
Buyers could then target the psychological level of $43 on their way north.
WTI hourly chart
WTI additional levels
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