WTI Price Analysis: Aims to extend rally above $78.00

• The oil prices have displayed a vertical run-up amid optimism over China’s reopening for international travelers.
• A Symmetrical Triangle formation is indicating a volatility contraction on a broader note.
• The RSI (14) has entered into the bullish range of 60.00-80.00, which might result in the activation of bullish momentum.

West Texas Intermediate (WTI), futures on NYMEX, are facing barricades in a stretching rally above the immediate hurdle of $78.00 in the early Asian session. Earlier, the black gold displayed a solid north-side move after supposing the critical resistance at around $77.00 as China reopened its economy for international travel, which has forced think tanks for an upward revision of oil demand projections.

Meanwhile, the US Dollar Index (DXY) is continuously demonstrating topsy-turvy moves around 103.00 ahead of the release of the United States Consumer Price Index (CPI) data, which will release on Thursday.

On a four-hour scale, the oil price is auctioning in a Symmetrical Triangle chart pattern that indicates volatility contraction. An explosion of the aforementioned chart pattern results in wider ticks and heavy volume. The upward-sloping trendline of the chart pattern is placed from December 9 low at $70.27. While the downward-sloping trendline is plotted from December 1 high at $83.30.

The 20-and 50-period Exponential Moving Averages (EMAs) are on the verge of delivering a bull cross.

Meanwhile, the Relative Strength Index (RSI) (14) has entered into the bullish range of 60.00-80.00, which might result in the activation of bullish momentum.

Usually, a perpendicular run-up is followed by a corrective move, therefore it will be optimal to place a long entry around the immediate support, which is January 9 high at $76.90. This will drive the asset toward Wednesday’s high of around $78.00, followed by January 3 high at $81.56.

Alternatively, a break below January 5 low at $72.64 will drag the oil price toward December 9 low at $70.27. The asset would be exposed for more downside to near 14 December 2021 low at $69.32 after surrendering the support at December 9 low at $70.27.

WTI four-hour chart