WTI drops heavily back to a 38.2% Fibo retracement level, bears in control

  • Maximum pressure campaign on Iran remains.
  • Week sees an aggressive sell-off of over 6.5% down to trendline support.

West Texas Intermediate crude continued to bleed out on Friday due to concerns over rising inventories despite the renewed positive sentiment around US and Chinese trade relations. WTI spot dropped below the 55 handle from a high of 55.66 to a low of 54.46 while futures for October delivery lost 24 cents, or 0.4%, to settle at $54.85 a barrel on the New York Mercantile Exchange completing a 3% decline for the week. 

Focus is on Iran

" While the fears of Iranian sanction easing, and a fairly bearish fundamental outlook for 2020 from the IEA has sentiment on edge, we think the downside move as been exaggerated," analysts at TD Securities argued:

"The maximum pressure campaign on Iran remains and potential avenues to ease the sanctions, such as renewing waivers, is unlikely to see Iranian production increase any time soon. Meanwhile Saudi's new energy minister and the Aramco IPO also suggest the Kingdom could be more aggressive with cuts in 2020 if needed. On the CTA front, WTI buying remained intact after the late-day rally, but remains on thin ice with $54/bbl serving as key selling levels. Meanwhile, CTAs have turned sellers in both Brent and heating oil, while gasoline trades near the $1.54/gal selling trigger."

WTI levels

A daily doji was marked which equated to an aggressive sell-off of over 6.5% down to trendline support. The 38.2% Fibonacci retracement of the July swing highs to May-July horizontal support has so far held up which guards 53 the figure and the 23.6% Fibo of the same range. The upside target is the 78.6% Fibo and Sep highs in the 58.70s. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD advances 1.10 amid upbeat trade headlines, after mixed US retail sales

EUR/USD is trading closer to 1.1050, up on the day. US Commerce Secretary Ross has expressed optimism about reaching a deal with China. The Retail Sales Control Group met expectations with 0.3%.


GBP/USD soars past 1.2900 as Farage gives additional boost to Conservatives

GBP/USD has leaped above 1.29, the highest since early November, as the Brexit Party has failed to field candidates in 43 additional seats, facilitating a victory for PM Boris Johnson.


USD/JPY clings to gains near session tops, around 108.70 post-US data

The USD/JPY pair maintained its strong bid tone near session tops and had a rather muted reaction to the mixed US economic data.


Gold looks to close week with small gains below $1,470

The precious metal struggled to find demand on Friday as the upbeat market mood on renewed hopes of the United States and China reaching a trade deal to avoid a tariff hike in December caused investors to move away from safe havens.

Gold News

Crypto Today: Playing with the thin red line

BTC/USD has fallen below $8,500 during the Asian trading session. A close below this support level would put $7,500 on the trading table. ETH/USD is moving below the 50-period exponential moving average.

Read more