US oil futures are attempting another rally on Wednesday after tumbling 8% on Tuesday. Prices met resistance around the 50-day moving average after struggling to rise much above it in the previous two days.
Medium-term outlook remains bearish but the near term bias is looking mixed as RSI has tipped upwards above 50 after yesterday’s slide, indicating a small gain in momentum. However, the %K line of the stochastic oscillator has reversed and dipped back below overbought territory after a bearish crossover, though this potentially provides scope for another move upwards.
The 50-day moving average remains the key resistance to overcome at 48.22. A rise above this level is needed to take prices into neutral territory. On the downside, the Kijun-sen line is providing immediate support at 43.81 but the key support to watch out for is the August 24 low of 37.74, which opens the way for fresh 6 ½ – year lows.
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