- WTI is in bearish consolidation, more declines likely on the cards.
- The US oil is on the verge of a bear flag breakdown on the 1H chart.
- OPEC+ outcome much-waited for fresh trading impetus.
WTI (futures on NYMEX) is nursing sharp declines around $59.50, with the sentiment tempered by fresh covid lockdowns announced in France, Canada and Japan.
Further, anxiety ahead of the all-important OPEC and its allies (OPEC+) meeting. to decide oil output policy. also keeps oil trades on the edge.
Additionally, oil continues to feel the heat of the demand concerns raised by the OPEC+, especially after the downward revision to the demand growth forecast for this year by 300,000 barrels per day (bpd).
From a technical perspective, the price of the WTI barrel is teasing a bear flag breakdown on the one-hour chart, with the pattern likely to get confirmed on an hourly closing below the rising trendline support at $59.43.
The downside break would open up floors towards a test of the pattern target measured near $57.40.
Ahead of that, the bears are expected to challenge the $58 threshold.
The Relative Strength Index (RSI) trades flat but remains well below the midline, suggesting that there is more scope for declines.
The bearish crossovers spotted on the said time frame also add credence to a potential move southwards.
For the negative sentiment to reverse, the bulls need a sustained break above the falling trendline resistance at $59.64, which would invalidate the bearish formation.
The next stop for the bulls will be then seen at the bearish 21-hourly moving average (HMA) at $60.07. Further up, the horizontal 200-HMA at $60.25 could be tested.
WTI one-hour chart
WTI additional levels
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