WTI Oil Outlook: Bulls consolidate ahead of key barriers after 4% advance on Tuesday

Slobodan Drvenica Windsor Brokers

US CRUDE OIL

WTI oil maintains positive tone on Wednesday, following previous day's 4% rally sparked by fresh hopes of US/China trade deal. Positive signal was also boosted by draw in US crude inventories (API report on Tuesday showed draw of 0.8 mln bls vs previous week's build of 4.8 mln bls). Tuesday's strong advance generated additional bullish signal on close well above 10SMA, which previously capped the action of four consecutive sessions. Fresh bulls are hesitating ahead of key barriers at $54.54 (faling 20SMA) and $54.79 (10 June high), but maintain strong momentum and underpinned by north-heading converged 5/10SMA's in attempt to form bull-cross. Firm break above $54.54/79 pivots is needed to confirm double-bottom ($50.59/71) and open way for stronger recovery. Improved sentiment supports the notion, as markets await Fed rate decision and release of EIA crude stocks data (1 mln bls draw f/c vs 2.2 mln bls build previous week) for fresh signals. Broken 10SMA now marks pivotal support ($52.91) and only firm break here would neutralize bulls.

Res: 54.54; 54.79; 55.00; 55.75
Sup: 53.70; 53.26; 52.91; 52.59

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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