WTI crude oil continues to experience a phase of consolidation, with price action confined within a symmetrical triangle pattern on its hourly chart. The commodity is testing key support levels and may be poised for a rebound toward resistance near the $70 per barrel mark.
However, technical indicators suggest the path of least resistance is downward. The 100-period simple moving average (SMA) remains below the 200-period SMA, signaling a bearish trend. Although both moving averages are oscillating, reflecting rangebound conditions, a break below the current support at $68.25 could trigger a downward move equivalent to the height of the pattern, potentially extending the sell-off.
Stochastic indicators are pointing lower, confirming prevailing selling pressure. Yet, with the oscillator nearing the oversold region, there are signs of potential exhaustion, which could prompt a reversal if the indicator turns upward. Similarly, the Relative Strength Index (RSI) is showing signs of recovery, indicating that buying momentum may be picking up, potentially driving the price back toward key upside targets.
Despite these mixed signals, WTI crude oil remains on a bearish trajectory, largely due to the uncertainty surrounding broader market conditions. OPEC+ has confirmed it will delay the planned production increase by three months, as previously anticipated. Traders are also adopting a cautious approach ahead of the U.S. Nonfarm Payroll (NFP) report, while concerns about possible trade disruptions under a future Trump administration are adding to the risk sentiment.
The upcoming U.S. jobs report is expected to show an acceleration in hiring for November. However, leading economic indicators remain inconclusive, and any surprises in the data could influence market sentiment. A stronger-than-expected report might fuel expectations of a less dovish Federal Reserve, potentially strengthening the U.S. dollar and weighing on commodity prices. Conversely, a weaker report could lead to speculation about a rate cut in December, boosting risk-on sentiment and providing support for oil prices.
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