Hold on to 21-SMA on 4H before the OPEC+ meeting
- WTI price turns red for the first time in seven days.
- Bulls turn cautious ahead of OPEC+ decision, despite DXY weakness.
- Defending 21-SMA on the 4H chart is key to retesting seven-year highs.
WTI (NYMEX futures) is posting small losses so far on Wednesday, although it is defending the $87 mark after repeated failures at the $88 level in recent sessions.
The pullback in US oil could be attributed to anxious markets as they eagerly await the meeting of OPEC and its allies (OPEC+) scheduled for later on Wednesday.
OPEC+ is expected to maintain its current policies of moderate production increases on Wednesday, Reuters reported, citing five sources from the producer group.
Meanwhile, sentiment around the US dollar and Wall Street indices will also play a pivotal role in oil price action.
Traders will also be watching Energy Information Administration (EIA) Crude Oil Stocks Change data closely for new trading opportunities.
From a short-term technical perspective, WTI bulls remain bullish as long as they hold above the 21 horizontal simple moving average (SMA) on the four-hour chart.
The 14-day Relative Strength Index (RSI) is holding well above the midline, keeping the upside potential intact.
If the bulls regain momentum, a retest of the seven-year high at $88.22 cannot be ruled out.
On the other hand, a break of the 21-SMA on a candlestick close basis every four hours will trigger a further decline towards the 50-SMA ascending at $86.05.