USOIL Reaches an Overbought Region, May Face Rejection at $85.39

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Key Resistance Levels: $80.00, $84.00, $88.00
Key Support Levels: $66.00,$62.200,$58.00

USOIL (WTI) Long-term Trend: Bullish
USOIL has been in an uptrend but it may face rejection at $85.39. The index is retesting the previous high of $85.39. In previous price action in October and November, the bulls failed to break above the overhead resistance. Meanwhile, on December 9 uptrend; a retraced candle body tested the 50% Fibonacci retracement level. The retracement indicates that WTI will rise to level 2.0 Fibonacci extension or $81.61. From the price action, buyers have broken above the Fibonacci extension and have reached a high of $84.

USOIL Reaches an Overbought Region, May Face Rejection at $85.39
USOIL – Daily Chart

Daily Chart Indicators Reading:
USOIL is at level 70 of the Relative Strength Index period 14. It indicates that the index is in the overbought region of the market. The current uptrend is likely to face rejection at the recent high. Besides, sellers will emerge to push prices down. The index price is above the 21-day SMA and 50 –day SMA which indicates a further upward move.

USOIL (WTI) Medium-term bias: Bullish
On the 4-hour chart, the index is in an uptrend. WTI price has broken above the resistance at level 83.00. Meanwhile, on December 12 uptrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that WTI will rise but reverse at level 1.278 Fibonacci extension or $84.22.

USOIL Reaches an Overbought Region, May Face Rejection at $85.39
USOIL – 4 Hour Chart

4-hour Chart Indicators Reading
The index is above the 80% range of the daily stochastic. The market has reached the overbought region. Sellers are likely to emerge to push prices down. The 21-day and 50-day SMAs are sloping upward indicating the uptrend. The uptrend will continue to the upside as long as price bars are above the moving averages.

General Outlook for USOIL (WTI)
USDOL has reached the overbought region of the market but may face rejection at $85.39. The current uptrend is likely to terminate at the previous price level of the market. WTI is trading at $84.39 at press time.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.