• A formation of the Three While Soldiers candlestick pattern after a fresh 11-month low has triggered a bullish reversal.
• The oil prices are currently facing barricades around the 20-EMA at $77.50.
• A range shift by the RSI (14) from the bearish range to 40.00-60.00 indicates that the bearish bias has faded.

West Texas Intermediate (WTI), futures on NYMEX, have turned sideways around $76.70 after failing to sustain above the critical resistance of $77.50 on Wednesday. For now, the three-day winning spell in the oil price is expected to terminate as market sentiment has turned bearish.

Meanwhile, the US Dollar Index (DXY) has climbed to near 103.90 as hawkish Federal Reserve (Fed) policy guidance has strengthened the risk aversion mood.

On a daily scale, the oil prices have displayed a sheer recovery after forming a Three White Soldiers candlestick pattern. The above-mentioned candlestick pattern is a realistic example of responsive buying action by the market participants and cements the odds of a bullish reversal. The black gold has reversed dramatically after printing a fresh 11-month low at $70.27 last week.

Currently, the 20-period Exponential Moving Average (EMA) at around $77.50 is acting as a major barricade for the oil bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bearish range of 20.00-40.00, which indicates that the downside bias has faded.

Going forward, a break above Wednesday’s high at $77.76 will drive the oil prices toward the psychological resistance at $80.00, followed by December 5 high at $82.74.

Alternatively, a decisive drop below the 11-month low at $70.27 will drag the asset toward 21 December 2021 low at $68.49 and 20 December 2021 low at $66.09.

WTI daily chart