Oil fades downside momentum near $79.00 as markets stabilize after risk aversion

• WTI crude oil seesaws at the lowest level in a fortnight, prods three-day losing streak but lacks downside momentum.
• Multiple downside supports, oversold RSI (14) line test Oil sellers.
• WTI recovery remains elusive below $81.20; further downside appears limited unless breaking $77.20.
• US Dollar’s pause after refreshing multi-day high allows Oil price to consolidate weekly losses.

WTI crude oil licks its wounds at the lowest level in two weeks, defensive around $78.90 heading into Thursday’s European session.

In doing so, the black gold prints the first daily gains in four while portraying a corrective bounce off a three-week-long horizontal support zone amid the oversold RSI (14) line.

With this, the energy benchmark braces for a further recovery toward the previous weekly low of around $79.65–70. However, a convergence of the 100-SMA and a downward-sloping trend line from August 10, close to $81.20, appears a tough nut to crack for the Oil buyers to crack.

In a case where the WTI bulls manage to keep the reins past $77.20, the odds of witnessing a run-up toward the monthly peak surrounding $84.35 can’t be ruled out.

On the flip side, a clear break of a horizontal area comprising multiple levels marked since late July, around $78.20-55, restricts the immediate downside of the WTI crude oil price.

Following that, the 200-SMA level of $78.00 and a horizontal line comprising tops marked during July 13 and 21, close to $77.20, will act as the last defense of the Oil buyers.

WTI crude oil: Four-hour chart

Trend: Limited recovery expected