WTI OIL Outlook: WTI Oil price eases on economic worries/overbought techs

Slobodan Drvenica Windsor Brokers

US CRUDE OIL

WTI oil price fell on Wednesday after cracking pivotal Fibo barrier at $59.62 (50% retracement of $76.88/$42.36 fall) but bulls failed to close above.
Fresh concerns about global economic growth that came after dissonant tones about US/China trade talks, weighed on oil price action, along with negative signals from slow stochastics' reversal from overbought territory and weakening momentum, which signaled price adjustment before bulls resume.
Oil prices remain supported by OPEC+ group output reduction, as well as US sanctions on Iran and Venezuela that also reduces global supply.
Tuesday's API crude stocks report showed weekly draw of 2.1 mln bls, which is lower than previous week's 2.5 mln bls draw but overall positive and supportive, as report showed that gasoline and distillate stocks also fell in the week ending 15 Mar.
Focus turns towards release of EIA report, due later today, which is forecasted to show slight build in oil inventories (0.3 mln bls) vs last week's significant draw of 3.8 mln bls that could add to negative near-term signals and push the price lower.
Reversal patter (Evening Doji Star) is forming on daily chart and further negative signal could be generated on pattern's completion (daily close in red and minimum blow 5SMA ($58.88).
Corrective dips should find ground above daily Tenkan-sen ($57.17) to keep larger bulls intact, while extension below would risk test of lower pivot at $56.45 (daily Kijun-sen). Firm break here would sideline bulls and signal deeper pullback.

Res: 59.37; 59.62; 59.84; 60.00
Sup: 58.57; 58.04; 57.90; 57.17

Interested in Oil technicals? Check out the key levels

1. R3 60.8
2. R2 60.35
3. R1 59.83
PP 59.38
1. S1 58.86
2. S2 58.41
3. S3 57.89

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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