WTI Oil outlook: Bears are taking a breather

Slobodan Drvenica Windsor Brokers

WTI Oil

WTI oil price edged higher from new almost one month low on Tuesday, signaling that steep fall that extends into second week, may take a breather.

The drop was sparked by profit-taking from previous $66.98/$79.35 rally, likely boosted by signals from President Trump about pressuring OPEC to drop oil prices to harm Russian oil exports and unexpectedly weak data from China’s manufacturing sector that raised concerns about demand from world’s biggest oil importer.

Warmer weather in the US also contributed to recent weakness, while turmoil in financial markets from surge in a China’s low-cost AI model provided some headwinds to bears.

Recent fall found a footstep at 50% retracement of $66.98/$79.35 advance ($73.16), with oversold conditions on daily chart, generating initial positive signal.

North-heading 14-d momentum is emerging from negative territory and contributes to recovery signals.

On the other hand, strong barrier lays at $74.62 (200DMA / broken Fibo 38.2%) and reaction here will probably define near term direction.

Recovery stall under this level to keep broader bears in play and offer better selling levels for fresh push lower.

Conversely, firm break above $74.62 to generate reversal signal, which will require lift above $75.00 zone (Fibo 38.2% of $79.35/$72.38 bear-leg / 20DMA) for confirmation.

Res: 73.89; 74.02; 74.62; 75.00.
Sup: 73.07; 73.16; 72.38; 71.71.

Interested in Oil technicals? Check out the key levels

1. R3 77.09
2. R2 75.98
3. R1 74.41
PP 73.3
1. S1 71.74
2. S2 70.63
3. S3 69.06

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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