WTI Oil Technical Outlook: Potential corrective rebound looms

• The three-month downtrend phase of WTI crude oil from January 2025 has stalled at a major range support of US$65.40/barrel.
• China’s impending expansionary policies to boost domestic consumption have negated the recent weakness in oil prices ignited by geopolitical factors, and US President Trump’s erratic trade tariffs policy.
• Technical analysis suggests WTI crude oil may shape a potential medium-term multi-week corrective rebound to retest the key 200-day moving average at around US$73.50/barrel.

After a failed bullish breakout at the start of 2025, the price actions of West Texas Oil CFD (a proxy of the WTI crude oil futures) have evolved into a medium-term downtrend phase from an intraday high of US$80.76 per barrel to its recent 5 March low of US$65.40, an accumulated loss of 19% in the past three months.

The recent sluggishness in oil prices has been primarily driven by geopolitical factors such as a looming potential peace deal between Ukraine and Russia brokered by the US that may boost Russian oil flows after the removal of sanctions imposed by the previous US White House administration.

Also, OPEC+ members have signaled a willingness to proceed with an earlier planned output hike to increase oil supply by 138,00o barrels per day in April triggering another layer of negative feedback loop into oil prices; despite the growing risk of a slower global economic growth prospects due to US President Trump’s erratic global trade tariffs policy.

Interestingly, the multi-month downtrend of the West Texas Oil CFD has managed to stall again at its major range support zone of US$67.55/65.40 per barrel where it has staged several multi-week rebounds in past occasions since March 2023.

West Texas Oil CFD has staged a multi-day rally of 4.7% from last Tuesday,11 March intraday low to today, 17 March current intraday high of US$68.45 per barrel.

The current upbeat tone in oil prices managed to negate the recent softness as highlighted earlier has been the willingness of China’s top policymakers to implement more expansionary fiscal policies to boost domestic consumption to reverse the ongoing deflationary spiral in the Chinese economy.

On Sunday, China’s State Council unveiled a “special action” plan to jumpstart consumer spending that consisted of measures to increase residents’ income and the establishment of a childcare subsidy scheme. This plan comes a week after Chinese Premier Li Qiang’s work report during the National People’s Congress which he mentioned the word “consumption” 27 times, the most in a decade, which was a switch from the previous year’s strongly emphasized word of “high-quality development”.

The daily MACD trend indicator of West Texas Oil CFD (a proxy of the WTI crude oil futures) has flashed out two bullish conditions. Firstly,

A bullish divergence on the MACD Histogram was triggered earlier on 10 March 2025 followed by today’s impending MACD bullish crossover of its signal line.

These observations suggest that there may be a change of trend condition for its current three-month downtrend phase from 15 January 2025 swing high to kickstart a potential minor corrective rebound sequence to retrace some of its earlier losses (see Fig 1).

Watch the US$65.40 key medium-term pivotal support and a clearance above the intermediate resistance of US$69.00 (also the 20-day moving average) may see the medium-term resistance coming in at US$73.50 (also the 200-day moving average).

However, a breakdown with a daily close below US$65.40 may trigger an impulsive down move sequence to expose the next medium-term support zone of US$60.20/58.80 in the first step.