Crude Oil: RSI on Cusp of Sell Signal

The price of oil halts a six-day rally, and a move below 70 in the Relative Strength Index (RSI) may accompany a larger pullback in crude as it reflects a textbook sell-signal.

Crude Oil Outlook

The price of oil trades in a narrow range as it struggles to extend the series of higher highs and lows carried over from last week, and failure to hold above $87.30 (78.6% Fibonacci retracement) may push crude back towards the $82.10 (50% Fibonacci retracement) to $82.60 (23.6% Fibonacci extension) area as the bullish momentum seems to be abating.

Next area of interest comes in around $78.70 (50% Fibonacci retracement), but the price of oil may track the positive slope in the 50-Day SMA ($78.94) as long as it holds above the monthly low ($83.46).

In turn, the price of oil may attempt to test the $93.50 (38.2% Fibonacci retracement) area should the overbought reading in the RSI persist, with a breach above the November 2022 high ($93.74) bringing the August 2022 high ($98.65) on the radar.