WTI Oil Outlook: Bears take a breather ahead of fresh downside
US CRUDE OIL
WTI oil is consolidating above new seven-month low at $63.10, hit on Thursday after steep four-day fall from $67.93 lower top.
Easing global supply concerns on increased production of world’s top oil producers, which aim to offset negative impact from shortage when US sanctions on Iran start, kept oil prices under increased pressure.
Rising US crude stocks added to negative sentiment, pushing oil prices to new multi-month lows.
Fresh news about easing global trade tensions lifted markets on Friday and could diminish fears of weaker global demand on escalation of crisis, with oil prices holding in directionless mode and keeping the downside vulnerable after the US permitted eight countries to keep buying Iranian oil.
WTI contract is on track for the fourth straight strong bearish weekly close which continues to weigh heavily on oil prices, along with bearish techs and strong negative sentiment.
Weekly close below cracked pivotal Fibo support at $63.57 (38.2% of $42.04/$76.88) would generate bearish signal for extension of downtrend from $76.88 high towards $60 zone (mid-March 2018 higher base) and $59.46 (Fibo 50% of $42.04/$72.88).
Negative stance would be additionally confirmed by close within thick weekly cloud, which was penetrated on Thursday’s extension lower (cloud top lays at $63.66).
Broken former key support at $64.43 (16 Aug low) now marks solid resistance, followed by falling 10SMA ($66.14) which is expected to limit extended upticks.
Res: 63.93; 64.43; 65.73; 66.14
Sup: 63.10; 61.80; 60.00; 59.46
Interested in WTI technicals? Check out the key levels
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.
