WTI outlook: Fresh fall of Oil price signals an end of corrective phase

Slobodan Drvenica Windsor Brokers

WTI

Oil price declines for the second straight day after recent three-day strong recovery rally was repeatedly rejected just under 200DMA ($77.80).

Subsequent weakness generated reversal signal following a break below pivotal support at $74.51 (50% retracement of $71.46 / $77.57 recovery leg, reinforced by 10DMA).

Daily studies weakened (MA’s are back to full bearish setup and 14-d momentum dipped to negative territory) adding to downside risk.

Quick change in the sentiment from increasingly bullish (on Libya supply concerns and geopolitical tensions) to negative, was mainly influenced by growing demand worries and elevated risk of broader economic slowdown.

This signals high volatility and points to fundamentals as currently key market drivers, which can quickly reverse direction, despite encouraging technical picture.

Res: 74.51; 75.24; 75.93; 76.13.
Sup: 73.79; 72.90; 72.19; 71.46.

Interested in WTI technicals? Check out the key levels

1. R3 78.58
2. R2 77.8
3. R1 76.58
PP 75.8
1. S1 74.58
2. S2 73.8
3. S3 72.58

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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