WTI Oil Technical: Medium-term downside momentum has eased – heochaua

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<li><strong>Two key positive technical analysis elements have emerged at the US$67.55/66.35 major support zone.</strong></li>
<li><strong>The current medium-term downtrend phase from September 2023 may have reached a terminal point for a potential bullish reversal.</strong></li>
<li><strong>China’s rosy retail sales and industrial production for November managed to offset downbeat housing data that provided a short-term tailwind for oil prices.</strong></li>
</ul>
<p>The medium-term downtrend phase of <a href="https://www.oanda.com/sg-en/trading/commodities/">West Texas Oil</a> (a proxy of WTI crude oil futures) in place since the 28 September 2023 high of US$95.50/barrel has almost reached the upper limit of a major support zone of US$67.55 (printed at an intraday low of US$67.82/barrel on 13 December 2023).</p>
<p>In addition, two key bullish elements have emerged where the price actions of West Texas Oil have traced out an impending bullish “Descending Wedge” configuration (see Fig 1) with a bullish divergence condition seen in the daily RSI momentum indicator at its oversold region on 12 December 2023.</p>
<h2><strong>Medium-term downtrend phase from September 2023 may have ended</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_12-20-55.png"><img loading="lazy" class="alignnone wp-image-809105 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_12-20-55-1024×585.png" alt="" width="700" height="400" srcset="https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_12-20-55-1024×585.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_12-20-55-300×171.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_12-20-55-768×438.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_12-20-55.png 1508w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 1:  West Texas Oil medium-term trend as of 15 Dec 2023 (Source: TradingView, click to enlarge chart)</p>
<p>All in all, such medium-term bullish elements suggest that the recent medium-term downtrend that recorded an accumulated loss of -29% (28 September 2023 high to 13 December 2023 low) may have reached a terminal point (end of the medium-term downtrend) which in turn advocates the potential start of a minor short-term uptrend phase in the first step for West Texas Oil (a proxy of WTI crude oil futures).</p>
<p>Recent key economic data and events also supported the current +6% gain in oil prices seen in the last two days; oil prices have seen a bit of a “demand pull” factor due to the improved liquidity conditions after the US Federal Reserve’s dovish pivot on Wednesday, 13 December.</p>
<p>Also, a set of China’s key economic data for November released today has indicated some positive turnaround where industrial production advanced by 6% y/y, above the 4.6% y/y growth recorded in October and beat expectations of 5.6% y/y. Retail sales rose by 10.1 y/y, much faster than 7.6% y/y in October, and notched its 11^th consecutive month of growth but below expectations of 12.5% y/y.</p>
<p>The rosy data from industrial production and retail sales have managed to offset the ongoing chronic weakness seen in the property development market as new home prices decelerated to -0.2% y/y in November from -0.1% y/y in October which marked its 5^th consecutive month of decline.</p>
<h2><strong>Watch the short-term key support at US$70.00</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_13-49-41.png"><img loading="lazy" class="alignnone wp-image-809106 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_13-49-41-1024×585.png" alt="" width="700" height="400" srcset="https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_13-49-41-1024×585.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_13-49-41-300×171.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_13-49-41-768×438.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/12/WTICOUSD_2023-12-15_13-49-41.png 1508w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 2:  West Texas Oil minor short-term trend as of 15 Dec 2023 (Source: TradingView, click to enlarge chart)</p>
<p>In the shorter term as depicted in the hourly chart, the price actions of West Texas Oil may have evolved into a minor uptrend phase with key short-term pivotal support at US$70.00.</p>
<p>A clearance above the near-term resistance zone of US$73.40/74.10 (the upper limit of the “Descending Wedge” & 20-day moving average) may add further bullish impetus to see the next intermediate resistance coming in at US$78.40 (also the 200-day moving average & 38.2% Fibonacci retracement of the medium-term downtrend from 28 September 2023 high to 13 December 2023 low).</p>
<p>However, failure to hold at US$70.00 invalidates the short-term recovery scenario to expose the US$67.00/67.00 major support area.</p>