- WTI price turns red for the first time in seven days.
- Bulls turn cautious ahead of the OPEC+ decision, despite the DXY weakness.
- Defending 21-SMA on the 4H chart is critical to retest the seven-year highs.
WTI (NYMEX futures) is posting small losses so far this Wednesday, although defending the $87 mark after repeated failures at the $88 threshold over the past few sessions.
The retreat in the price of US oil could be attributed to anxious markets, as they look forward to the OPEC and its allies (OPEC+) meeting due later this Wednesday.
OPEC+ is likely to maintain its existing policy of moderate output increases on Wednesday, Reuters reported, citing five sources from the producers’ group.
Other key factors playing a pivotal role in oil price action are sentiment around the US dollar and Wall Street indices.
Traders will also closely eye the Energy Information Administration (EIA) Crude Oil Stocks Change data for fresh trading opportunities.
From a near-term technical perspective, WTI bulls remain hopeful so long as they hold above the horizontal 21-Simple Moving Average (SMA) on the four-hour chart.
The 14-day Relative Strength Index (RSI) holds well above the midline, keeping bullish potential intact.
If the bulls regain momentum, then a retest of the seven-year top at $88.22 cannot be ruled out.
On the flip side, a breach of the 21-SMA on a four-hourly candlestick, on a closing basis will trigger a fresh downswing towards the ascending 50-SMA at $86.05.