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WTI Crude Soars Higher but the RSI Signals Overbought

WTI crude oil

Looking at the widely traded U.S. West Texas Intermediate (WTI) crude oil futures contract on the above daily MT 4 price action chart, oil is trading around $51 per barrel during the early Asian trade session. This is above the multi-month high price point at $50.95.

Last night, in Washington DC, all out rioting took place. President Donald Trump has incited his supporters to violence. They took to the streets, violence, rioting and one person has been killed. The U.S. Congress was stormed by armed militants.

This forced the government to flee which delayed the certification of the Electoral College. Order has now been restored. The Congress building is secure and the U.S. Senate is back in session.

The United States is releasing key labor data. The Department of Labor will publish weekly first time and continuing claims jobs data. Germany will release monthly factory orders. Italy will publish monthly retail sales as well as their preliminary consumer price index (CPI).

The Euro area is also coming out with their preliminary consumer price index. The European Central Bank will publish their monetary policy meeting policy account.       

Daily WTI Crude Oil Technical Analysis              

Looking at price action on the above WTI crude oil chart, the 14 day relative strength index (RSI) is signaling overbought which could bring a correction lower for the WTI contract.

With that said, the first upside barrier lines up at $51 per barrel and the next layer of technical resistance coming into play at $54.68 per barrel. A daily close above 54.68 opens the door to challenge the 2020 low price point at $57.45 per barrel. The key round level at $60 then comes into play.

On the downside, the first layer of support lines up at $49.45 to $49.50. The 21 day simple moving average is at $48.25 with $46.30 then coming into focus. The rising trend line from 12 April lines up at $41.25 per barrel.  

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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