Oil outlook: Bears regain control as fears of conflict escalation fade
WTI
WTI oil price fell to the lowest in almost four weeks in early Monday, following a short-lived spike higher on Friday, sparked ty Israel’s attack on Iran.
The sentiment changed quickly to negative on fading signals of escalation of the conflict and traders shift focus to fundamentals, with rise in US crude inventories adding to demand concerns and deflating oil prices, along with stronger dollar on fading expectations for Fed rate cut.
Bears probed again through pivotal Fibo support at $81.42 (38.2% of $71.40/$87.61 upleg) but need to register a daily close below this level to validate negative signal.
Rising negative momentum on daily chart and double bear-cross (10/20DMA and 5/30 DMA) weigh on near-term action, with sustained break of $81.42 trigger to open way for attack at next key supports at $80.00/$79.80 zone (psychological / 200DMA and $79.50 (50% retracement).
Broken 30DMA ($82.94) should ideally cap and keep fresh bears intact, while acceleration and close above $84.00/20 zone (round figure / converged 10/20DMA’s) would neutralize near-term bears.
Res: 82.53; 82.94; 83.78; 84.20.
Sup: 81.42; 80.70; 80.00; 79.50.
Interested in WTI 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.
