US oil is consolidating after 5% fall on Thursday

Slobodan Drvenica Windsor Brokers

US CRUDE OIL

US oil is in recovery mode in early Friday and returned above $49.00 handle after suffering heavy losses the day before. Oil price fell sharply on Thursday, losing 5% for the day after OPEC announced agreement for nine-month extension of production cut.
OPEC decision disappointed markets that were expecting stronger action, prompting traders out of long positions that triggered sharp sell-off.
Oil price registered the biggest one-day fall since 08 Mar on Thursday that turned near-term focus lower after daily close below a cluster of supports at $49.76/$49.44, formed by 10/200 and 55SMA’s, as well as $48.83 (Fibo 38.2% of $43.74/$51.98 rally).
Daily 20SMA at $48.47 was cracked on Friday’s extension to $48.24 low, but is still acting as valid support which may hold for corrective rally on strongly oversold 4-hr studies.
Near-term action is biased lower on fresh bearish sentiment and may extend losses towards $47.86 (daily Kijun-sen / 50% retracement) after correction which should be capped under psychological $50.00 barrier, reinforced by daily Tenkan-sen.

Res: 49.23; 49.67; 50.00; 50.55
Sup: 48.83; 48.24; 47.86; 47.35

Interested in Oil technicals? Check out the key levels

1. R3 49.09
2. R2 48.99
3. R1 48.91
PP 48.81
1. S1 48.73
2. S2 48.63
3. S3 48.55

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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