WTI OIL Outlook: Recovery remains underpinned by rising cloud base but faces key barriers
US CRUDE OIL
Recovery from the bottom of steep three-day fall at $57.32, is running out of steam, as Tuesday's action holds in red and is capped by falling 5SMA ($59.32). Oil price bounced after last week's steep fall was contained by Fibo support at $57.32 (38.2% of $42.36/$66.58) and subsequent bounce managed to repeatedly close above the base of rising daily cloud and 100SMA, reducing immediate downside risk.
Bounce was triggered by oversold daily stochastic and profit-taking after the price fell 8.1% in just three days.
Rising cloud base and 100SMA continue to underpin, but weakening momentum and overall bearish picture, partially offset positive signals.
Conflicting signals also come from the fundamental side as US sanctions on Iran and Venezuela and OPEC+ production cut oppose fears of reduced demand on fears of trade war escalation.
Stronger bullish signals can be expected on extension above key barriers at $59.85 (Fibo 38.2% of $63.93/$57.32) and $60.16 (200SMA), while failure to break here would generate initial negative signal, which would require confirmation on fall through cloud base/100SMA.
Res: 59.85; 60.16; 60.63; 61.19
Sup: 58.59; 58.43; 58.12; 57.49
Interested in Oil 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.
