Oil outlook: Strong weekly gain boosts reversal signals
|WTI Oil
WTI oil has registered the second weekly gain (the contract was up 3.3% this week), lifted by growing optimism over easing trade tensions between the USA and the European Union and signals of possible deal, new US sanctions on Iran and initial positive signals in US - China trade relations.
Reversal signal is developing on daily and weekly charts, as bounce from new 4-year low ($55.12) has so far retraced over 50% of $72.27/$55.12 bear-leg, while Doji morning star pattern has formed on weekly chart.
However, recovery may face increased headwinds as technical studies on daily chart are predominantly negative and still fully bearish on weekly, suggesting that much stronger work at the upside is still required to improve the picture (sustained break above cracked Fibo 50%, reinforced by daily Kijun-sen at $63.63, seen as minimum requirement).
Also, fundamental factors that support current recovery would be countered by the latest downgrade of oil prices and demand growth by OPEC, Energy Information Administration, in light that existing economic crisis could be deepened if negotiations fail, and trade war escalates.
Res: 64.16; 65.22; 65.72; 66.08.
Sup: 63.32; 62.65; 61.67; 60.00.
Interested in Oil technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.