WTI crude oil closed at 94.70 on Friday and made a 21-week closing low. It also had a first close below the 40-week moving average since November 2021. WTI trend momentum has been weakening since a high range reversal of a failed new high, 6 weeks ago. We expect high volatility this week, around the FOMC meeting on Wednesday, and I am expecting a potential test of the 90 range or lower in the next week or two.
Aside from this recent 6-week rollover, the 10- and 20- week MAs have started to roll over and the weekly MACD turned down 5-weeeks ago, indicating weaker longer-term trend momentum as well. Global Central Bank tightening is likely not helping, from the demand side. Market volatility is very high and crude oil is a very news driven market. On any potential reversal, 105-110 is a key overhead resistance level. A close over 110 would offset this recent downtrend.
DISCLOSURE: I am currently short the energy sector.