WTI Oil Outlook: Fresh strength pressures key barrier at $70.20
US CRUDE OIL
WTI oil regained traction on Monday and probes above psychological $710 barrier for the first time since 19 July. Worries about global supply continue to underpin oil prices but support is partially offset by lowered tension about global trade war. Today's rally improves daily techs as the price broke above 55SMA and 14-d momentum is attempting to create a bull-cross with its 7-d MA, but slow stochastic is entering overbought zone and may reduce rally's pace. Recovery extension is pressuring pivotal barrier at $70.20 (Fibo 38.2% of $75.34/$67.03, reinforced by 30SMA/19 July strong upside rejection), break of which is needed to further improve near-term outlook on bullish signal that would be generated on clear break higher. Extension above $70.20 and falling 20SMA ($70.51) would open way for stronger recovery and expose barriers at $71.19 (50% of $75.34/$67.03) and $71.64 (13 July lower top). On the other side, overbought conditions may result in stronger hesitation at $70.20 barrier, with subsequent dips expected to find footstep above broken 55SMA ($69.19) and keep bullish near-term bias. Bearish scenario requires confirmation on break and close below north-turning 10SMA ($68.70) to expose rising 100SMA ($67.83) and risk retest of key near-term support at $67.03 (17/18 July lows).
Res: 70.20; 70.51; 71.19; 71.64
Sup: 69.19; 68.78; 68.24; 67.83
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.
