WTI Oil outlook: Double failure at key support zone signals that pullback from new multi-month high

Slobodan Drvenica Windsor Brokers

WTI Oil

WTI oil extended pullback from new multi-month high ($66.46) in early Tuesday’s trading, following gap-lower opening at the start of the week and over 4% drop on Monday which marks the biggest daily loss since Nov 11.

Signals of de-escalation in US-Iran tensions eased supply fears and prompted strong selling, along with firmer dollar.

Although Tuesday’s fresh extension lower pointed to rising risk of deeper correction of $54.87/$66.46 recovery leg, some technical signals will be still required to verify the action.

A double attempt through key supports at $62.21/03 (200DMA/Fibo 38.2% of $54.87/$66.46) has so far been repeatedly rejected which develops signal of healthy correction before larger bulls regain control.

The notion is supported by a double bear-trap under 200DMA, multiple MA bull-crosses and positive momentum studies.

Repeated close above 200DMA to generate initial bullish signal, with extension above $64.00 zone needed to boost the structure for attempts to fill Monday’s gap and open way for retest of key barriers at $66.40/46 (tops of Sep 26/Jan 29) and confirm reversal.

Res: 63.00; 63.72; 64.00; 64.66.
Sup: 62.50; 52.21; 62.03; 61.10.

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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