WTI oil has staged quite a strong rally from the August 2 low of 39.23 to the August 16 high of 46.71 but stopped just before the 61.8% Fibonacci retracement level at 46.88 (retracement of downleg from 51.65 to 39.23).
The market maintains a short term bullish bias after breaking above the 100-day moving average. Immediate support lies at the 50% Fibonacci at 45.43.
As long as prices remain above the 50% Fibonacci there is scope for a move higher. A break above resistance at the 61.8% Fibonacci would propel prices towards the 78.6% Fibonacci level at 48.97. RSI is bullish above 50 which supports the bullish view. Also the crossover of the 100-day moving average above the 200-day moving average is a bullish signal.
A break below 45.43 support would weaken the bullish outlook in the short term and prices could fall towards 43.96 (38.2% Fibonacci) and then 42.14 (23.6% Fibonacci). Falling below major support at the 200-day moving average at 40.85 would bring back the medium term bearish trend that took place from 51.65 (June 9) to 39.23 (August 3).
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.