• Oil prices have weakened after surrendering the critical support of $86.00.
• The 20-EMA has acted as a major hurdle for bulls.
• A downside move towards the 38.2% Fibo retracement is highly expected.

West Texas Intermediate (WTI), futures on NYMEX, are tumbling after failing to defend the critical support of $86.00 in the Asian session. The black gold has refreshed its seven-month low at $85.21 and is eyeing more weakness amid an overall bearish structure.

On a daily scale, the oil prices are declining towards the 38.2% Fibonacci retracement (placed from 21 April 2020 low at $8.46 to March 3 high at 126.51) at $81.23. The black gold is auctioning in a Falling Channel chart pattern whose upper portion is placed from June 14 high at $121.02 while the lower portion is plotted from May 19 low at $102.99.

The 20-period Exponential Moving Average (EMA) at $94.06 has acted as major resistance for the counter.

Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of dropping into the bearish range of 20.00-40.00, which signals a continuation of downside momentum.

A decisive drop below the round-level support of $85.00 will drag the oil prices towards the 38.2% Fibo retracement at $81.23, followed by July 6 high at $76.40.

On the flip side, bulls could defend the downside momentum and approach a bullish reversal if the asset oversteps August 29 high at $97.00. An occurrence of the same will send the asset towards the psychological resistance at $100.00 and July 8 high at $102.77.

WTI daily chart